We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Cliffs Natural Resources Inc (NYSE:CLF).
Cliffs Natural Resources Inc (NYSE:CLF) was in 17 hedge funds’ portfolios at the end of September. CLF has experienced a decrease in support from the world’s most elite money managers in recent months. There were 19 hedge funds in our database with CLF holdings 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 A10 Networks Inc (NYSE:ATEN), Theravance Biopharma Inc (NASDAQ:TBPH), and Kirkland’s, Inc. (NASDAQ:KIRK) to gather more data points.
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In the eyes of most market participants, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open today, Our researchers hone in on the masters of this club, about 700 funds. Most estimates calculate that this group of people shepherd the lion’s share of all hedge funds’ total capital, and by tailing their highest performing stock picks, Insider Monkey has spotted several investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Keeping this in mind, let’s go over the fresh action surrounding Cliffs Natural Resources Inc (NYSE:CLF).
How have hedgies been trading Cliffs Natural Resources Inc (NYSE:CLF)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Donald G. Drapkin and Douglas Taylor’s Casablanca Capital has the most valuable position in Cliffs Natural Resources Inc (NYSE:CLF), worth close to $19.3 million, accounting for 100% of its total 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $12.4 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish comprise Philippe Laffont’s Coatue Management, D E Shaw and David Costen Haley’s HBK Investments.
Seeing as Cliffs Natural Resources Inc (NYSE:CLF) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there is a sect of hedgies who were dropping their entire stakes by the end of the third quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest stake of the 700 funds monitored by Insider Monkey, worth close to $10.6 million in stock, and Jonathan Barrett and Paul Segal’s Luminus Management was right behind this move, as the fund cut about $5.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cliffs Natural Resources Inc (NYSE:CLF) but similarly valued. We will take a look at A10 Networks Inc (NYSE:ATEN), Theravance Biopharma Inc (NASDAQ:TBPH), Kirkland’s, Inc. (NASDAQ:KIRK), and XO Group Inc (NYSE:XOXO). This group of stocks’ market valuations are closest to CLF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATEN | 14 | 31137 | 4 |
| TBPH | 10 | 105005 | -3 |
| KIRK | 11 | 46620 | -4 |
| XOXO | 16 | 108910 | -1 |
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $56 million in CLF’s case. XO Group Inc (NYSE:XOXO) is the most popular stock in this table. On the other hand Theravance Biopharma Inc (NASDAQ:TBPH) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Cliffs Natural Resources Inc (NYSE:CLF) 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.
