Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Five Basic Materials Stocks Hedge Funds Love

Page 1 of 2

Material stocks are the basis of the global economy. Without copper, chemicals, fertilizer, and crude, there would be no modern day economy as we know it. Given materials essential place in the economy, many smart money funds have invested in them. In this article, we take a look at five basic material stocks that hedge funds love, Monsanto Company (NYSE:MON), Air Products & Chemicals, Inc. (NYSE:APD), Dow Chemical Co (NYSE:DOW), Freeport-McMoRan Inc (NYSE:FCX), and U.S. Silica Holdings Inc (NYSE:SLCA).

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

mine, copper, arizona, metals, ponds, aerial, vast, tailings, rock, concentric lines, process, deposits, minerals, porphyry, elevated, over, dump, ore, dirt, benches, above, open pit, huge, desert, molybdenum, large, geology, acidic

Tim Roberts Photography/shutterstock.com

#5 U.S. Silica Holdings Inc (NYSE:SLCA)

– Number of Hedge Fund Holders (as of December 31): 43
– Total Value of Hedge Fund Holdings (as of December 31): $1.07 billion
– Hedge Fund Holdings as Percent of Float (as of December 31): 23.80%
U.S. Silica Holdings Inc (NYSE:SLCA) is an indirect play on shale competitiveness. If shale crude production increases, demand for fracking sand will rise, and U.S. Silica Holdings’ fundamentals will benefit. If shale production succumbs to the low oil prices, however, the inverse could occur. At the moment, the market is undecided, as crude prices have dipped below the psychological important $50 per barrel level. In terms of smart money sentiment, 43 funds owned $1.07 billion of U.S. Silica Holdings Inc (NYSE:SLCA) and accounted for 23.80% of the float on December 31, up from 39 funds and $750.75 million respectively on September 30. Those numbers are out of the 742 total funds we track.

Follow U.s. Silica Holdings Inc. (NYSE:SLCA)
Trade (NYSE:SLCA) Now!

#4 Freeport-McMoRan Inc (NYSE:FCX)

– Number of Hedge Fund Holders (as of December 31): 43
– Total Value of Hedge Fund Holdings (as of December 31): $2.17 billion
– Hedge Fund Holdings as Percent of Float (as of December 31): 11.40%

Although copper prices have rallied since November of last year on Trump’s infrastructure plan hopes, Freeport-McMoRan Inc (NYSE:FCX) hasn’t done as well as other infrastructure plays. The main culprit has been due to the uncertainty surrounding the company’s giant Grasberg copper mine in Indonesia, which accounts for around a third of the company’s annual copper production. If the uncertainty with the Indonesian government — which wants to renegotiate terms — continues or the final terms in potential arbitration or settlement aren’t as favorable as expected, Freeport-McMoRan could continue to lag its peers. If the terms are better, the stock could rally. Many bulls and 43 elite funds at the end of 2016 certainly hope the latter occurs.

Follow Freeport-Mcmoran Inc (NYSE:FCX)
Trade (NYSE:FCX) Now!
Page 1 of 2