Teck Resources Ltd (USA) (TCK): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Teck Resources Ltd (USA) (NYSE:TCK) was in 14 hedge funds’ portfolio at the end of the first quarter of 2013. TCK has seen an increase in hedge fund interest lately. There were 13 hedge funds in our database with TCK holdings at the end of the previous quarter.

In the eyes of most traders, hedge funds are assumed to be worthless, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at present, we look at the aristocrats of this club, around 450 funds. It is estimated that this group has its hands on the majority of all hedge funds’ total capital, and by paying attention to their top investments, we have figured out a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as beneficial, positive insider trading sentiment is another way to parse down the marketplace. Obviously, there are lots of incentives for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this method if investors understand where to look (learn more here).

Keeping this in mind, it’s important to take a look at the recent action surrounding Teck Resources Ltd (USA) (NYSE:TCK).

How are hedge funds trading Teck Resources Ltd (USA) (NYSE:TCK)?

In preparation for this quarter, a total of 14 of the hedge funds we track were long in this stock, a change of 8% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.

Of the funds we track, Tetrem Capital Management, managed by Daniel Bubis, holds the most valuable position in Teck Resources Ltd (USA) (NYSE:TCK). Tetrem Capital Management has a $89.5 million position in the stock, comprising 2.7% of its 13F portfolio. The second largest stake is held by Alec Litowitz and Ross Laser of Magnetar Capital, with a $19.5 million position; 0.6% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Jason Adler’s AlphaBet Management, Clint Carlson’s Carlson Capital and Israel Englander’s Millennium Management.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Magnetar Capital, managed by Alec Litowitz and Ross Laser, assembled the most outsized position in Teck Resources Ltd (USA) (NYSE:TCK). Magnetar Capital had 19.5 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $12.5 million position during the quarter. The following funds were also among the new TCK investors: Israel Englander’s Millennium Management, Arvind Sanger’s GeoSphere Capital Management, and Cliff Asness’s AQR Capital Management.

What do corporate executives and insiders think about Teck Resources Ltd (USA) (NYSE:TCK)?

Insider buying is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, Teck Resources Ltd (USA) (NYSE:TCK) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s studies, everyday investors should always pay attention to hedge fund and insider trading activity, and Teck Resources Ltd (USA) (NYSE:TCK) applies perfectly to this mantra.

Click here to learn why you should track hedge funds