Is it smart to be bullish on Southern Copper Corp (NYSE:SCCO)?
In the eyes of many investors, hedge funds are viewed as overrated, old financial tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open currently, Insider Monkey focuses on the upper echelon of this club, around 525 funds. It is widely held that this group has its hands on most of the hedge fund industry’s total capital, and by watching their highest performing investments, we’ve discovered a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as necessary, positive insider trading activity is a second way to analyze the financial markets. Just as you’d expect, there are lots of incentives for an insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this tactic if piggybackers know what to do (learn more here).
Keeping this in mind, let’s analyze the latest info about Southern Copper Corp (NYSE:SCCO).
How are hedge funds trading Southern Copper Corp (NYSE:SCCO)?
At the end of the second quarter, a total of 17 of the hedge funds we track held long positions in this stock, a change of -11% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.
According to our 13F database, Jim Simons’s Renaissance Technologies had the most valuable position in Southern Copper Corp (NYSE:SCCO), worth close to $50.4 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Carlson Capital, managed by Clint Carlson, which held a $13.4 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Ray Dalio’s Bridgewater Associates, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
Due to the fact Southern Copper Corp (NYSE:SCCO) has experienced declining interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of money managers that elected to cut their entire stakes in Q1. It’s worth mentioning that Richard Chilton’s Chilton Investment Company dumped the biggest position of all the hedgies we key on, valued at close to $14.8 million in stock. áIan G. Banwell’s fund, Round Table Investment Management, also sold off its stock, about $1.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds in Q1.
How are insiders trading Southern Copper Corp (NYSE:SCCO)?
Legal insider trading, particularly when it’s bullish, is best served when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time frame, Southern Copper Corp (NYSE:SCCO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Southern Copper Corp (NYSE:SCCO). These stocks are Lihua International Inc (NASDAQ:LIWA), Augusta Resource Corp. (USA) (NYSEAMEX:AZC), Sterlite Industries India Limited (ADR) (NYSE:SLT), and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX). This group of stocks are in the copper industry and their market caps resemble SCCO’s market cap.
