Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has recovered some of its 2013 losses in the last few weeks, but one indicator suggests you should still sell it if you’re holding on.
To many of your fellow readers, hedge funds are viewed as delayed, outdated investment vehicles of a forgotten age. Although there are more than 8,000 hedge funds with their doors open in present day, Insider Monkey looks at the elite of this club, around 525 funds. Analysts calculate that this group controls most of all hedge funds’ total capital, and by keeping an eye on their highest quality equity investments, we’ve unearthed a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as crucial, optimistic insider trading sentiment is another way to analyze the investments you’re interested in. Obviously, there are lots of reasons for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).
What’s more, it’s important to analyze the latest info about Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX).
Hedge fund activity in Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)
At the end of the second quarter, a total of 46 of the hedge funds we track were long in this stock, a change of -18% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes considerably.
When using filings from the hedgies we track, John Paulson’s Paulson & Co had the largest position in Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), worth close to $428.1 million, comprising 3% of its total 13F portfolio. Coming in second is D. E. Shaw of D E Shaw, with a $206.7 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Steven Cohen’s SAC Capital Advisors, and Jamie Zimmerman’s Litespeed Management.
Because Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has faced dropping sentiment from upper-tier hedge fund managers, it’s easy to see that there was a specific group of hedge funds who were dropping their positions entirely in Q1. It’s worth mentioning that Doug Silverman and Alexander Klabin’s Senator Investment Group sold off the largest position of the 450+ funds we track, worth an estimated $331 million in stock, and Leon Cooperman of Omega Advisors was right behind this move, as the fund said goodbye to about $102.3 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 10 funds in Q1.
How are insiders trading Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)?
Insider buying made by high-level executives is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has experienced 5 unique insiders buying, and 1 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX). These stocks are Lihua International Inc (NASDAQ:LIWA), Augusta Resource Corp. (USA) (NYSEAMEX:AZC), Sterlite Industries India Limited (ADR) (NYSE:SLT), and Southern Copper Corp (NYSE:SCCO). This group of stocks are the members of the copper industry and their market caps match FCX’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Lihua International Inc (NASDAQ:LIWA) | 5 | 0 | 0 |
| Augusta Resource Corp. (USA) (NYSEAMEX:AZC) | 4 | 0 | 0 |
| Sterlite Industries India Limited (ADR) (NYSE:SLT) | 7 | 0 | 0 |
| Southern Copper Corp (NYSE:SCCO) | 17 | 0 | 1 |
Using the results shown by the previously mentioned tactics, regular investors should always track hedge fund and insider trading sentiment, and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) is an important part of this process.
