United States Steel Corporation (NYSE:X) is enjoying a strong day after the U.S government imposed harsh anti-dumping tariffs on steel being imported from China, similar penalties of which have also been imposed on imports from Italy, South Korea, India, and Taiwan. The tariffs are a response to accusations that China and the four other aforementioned countries were dumping excess steel at unfairly low rates, which threatened thousands of local jobs. China’s Commerce Ministry decried the penalties as being discriminatory, even after they imposed similar measures on steel from the European Union, Japan, and South Korea last month. Shares of United States Steel Corporation (NYSE:X) have gained over 3% today, after topping 6% earlier in the day.
We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still good idea to keep an eye on hedge fund activity (see the details here). With this in mind, as the latest round of 13F filings has just ended, let’s examine the smart money sentiment towards United States Steel Corporation (NYSE:X).
United States Steel Corporation (NYSE:X) investors should be aware of an increase in support from the world’s most elite money managers lately. United States Steel Corporation (NYSE:X) was in 28 hedge funds’ portfolios at the end of the first quarter of 2016. There were 22 hedge funds in our database with United States Steel Corporation (NYSE:X) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Groupon Inc (NASDAQ:GRPN), AllianceBernstein Holding LP (NYSE:AB), and YY Inc (ADR) (NASDAQ:YY) to gather more data points.
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According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in United States Steel Corporation (NYSE:X). Adage Capital Management has a $41.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Water Street Capital, managed by Gilchrist Berg, which holds a $28.1 million call position; 1.1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Ken Griffin’s Citadel Investment Group, Jonathan Barrett and Paul Segal’s Luminus Management, and Robert Bishop’s Impala Asset Management.
On the next page we’ll look at some funds that took up positions in United States Steel Corporation (NYSE:X) during Q1, as well as compare the stock to a handful of others with similar market caps.
Key money managers were leading the bulls’ herd. Adage Capital Management assembled the most valuable position in United States Steel Corporation (NYSE:X). Adage Capital Management had $41.7 million invested in the company at the end of the quarter. Water Street Capital also initiated a $28.1 million position during the quarter. The other funds with brand new United States Steel Corporation (NYSE:X) positions are Robert Bishop’s Impala Asset Management, Kurt Billick’s Bocage Capital, and Robert Polak’s Anchor Bolt Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as United States Steel Corporation (NYSE:X) but similarly valued. These stocks are Groupon Inc (NASDAQ:GRPN), AllianceBernstein Holding LP (NYSE:AB), YY Inc (ADR) (NASDAQ:YY), and Cheetah Mobile Inc (ADR) (NYSE:CMCM). This group of stocks’ market values resemble X’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GRPN | 18 | 133769 | -2 |
| AB | 8 | 40091 | -2 |
| YY | 19 | 185134 | 3 |
| CMCM | 7 | 18613 | 0 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $230 million in United States Steel Corporation (NYSE:X)’s case. YY Inc (ADR) (NASDAQ:YY) is the most popular stock in this table. On the other hand Cheetah Mobile Inc (ADR) (NYSE:CMCM) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks United States Steel Corporation (NYSE:X) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
