This Is How Hedgies Have Geared Up for the Steel Industry’s Turnaround

#3 United States Steel Corporation (NYSE:X)

 – Investors with Long Positions (as of December 31): 22

 – Aggregate Value of Investors’ Holdings (as of December 31): $66.41 Million

The number of hedge funds invested in United States Steel Corporation (NYSE:X) fell by three, while the value of their collective investments slipped by about 32% in the October-to-December period, during which time the company’s stock price plunged by more than 23%. However, so far this year shares of United States Steel have almost doubled in value, riding high on the thesis of recovery in heavy construction. More than 88% of the company’s outstanding shares are held by institutions according to Thomson Reuters, including 5.7% of which are held by funds in our database. Luminus Management, which is led by Jonathan Barrett and Paul Segal acquired 2.14 million shares of United States Steel Corporation (NYSE:X) during the fourth trimester.

#2 Commercial Metals Company (NYSE:CMC)

 – Investors with Long Positions (as of December 31): 22

 – Aggregate Value of Investors’ Holdings (as of December 31): $95.65 Million

Shares of the $2 billion manufacturer of steel products rose by a meager 1% during the December quarter, during which time the net number of hedgies bullish on the company increased by two and their aggregate investments rose by about 8%. On a year-to-date basis, Commercial Metals Company (NYSE:CMC)’s stock price has sky rocketed by about 23.5%, despite the company missing top line estimates in its financial results for the first quarter of fiscal year 2016 ending November 30. However, quarterly EPS of $0.22 was in-line with expectations. Margins in the Americas Mills segment improved compared to the same quarter a year ago, as finished steel prices declined at a slower pace than ferrous scrap prices, though many other segments performed poorly because of the steel import activity in the U.S. Cliff Asness‘ AQR Capital Management upped its stake in Commercial Metals Company (NYSE:CMC) by 69% to 2.66 million shares during the fourth quarter.

#1 Steel Dynamics, Inc. (NASDAQ:STLD)

 – Investors with Long Positions (as of December 31): 28

 – Aggregate Value of Investors’ Holdings (as of December 31): $535.08 Million

The net number of hedge funds bullish on the company increased by four during the October-to-December period, though the aggregate value of their holdings dipped by 17% despite the stock gaining a little over 4% during the period. Steel Dynamics, Inc. (NASDAQ:STLD) has also risen sharply in 2016, similar to its peers mentioned above, posting more than 21% gains so far. Recently the company raised its dividend and announced that its first quarter financial results will come in well above expectations, primarily on the back of an increase in shipments of flat-roll products. Legg Mason Capital Management, now a part of ClearBridge, increased its stake in Steel Dynamics, Inc. (NASDAQ:STLD) by 2% to 4.87 million shares during the fourth trimester.

Disclosure: None