Hedge Funds Are Pulling Out Of These Basic Industries Stocks

As with the former top two picks in the sector, CF Industries Holdings, Inc. (NYSE:CF), previously the third-most popular stock in the sector among the funds we track also witnessed declining smart money sentiment in the second quarter. 47 hedge funds in our database were shareholders of the stock on June 30, down from 60 three months earlier. The value of their holdings also declined by 10% to $2.29 billion even though the stock gained 13% during the quarter, showing that there was a rather strong sell off of shares by the smart money we follow. The sellers have been proven right so far, as shares of CF Industries Holdings, Inc. (NYSE:CF) are down by 5% in the third quarter. George Soros, Ray Dalio, and Louis Bacon are just some of the investors that sold out of the stock in the second quarter. D.E Shaw’s D E Shaw holds the largest position with 6.91 million shares valued at over $444 million.

Hedge fund ownership in W. R. Grace & Co (NYSE:GRA) fell to 45 from 54, though the value of hedge funds’ holdings in the stock inched up to $3.29 billion. As the value of shares also inched up during the period by about the same 2% figure, the aggregate holdings of funds did stay about the same, despite nine less funds having ownership positions in the stock. W. R. Grace & Co (NYSE:GRA) is set to spin off its construction and packaging businesses into a separate company called GCP Applied Technologies, a move which will be completed next year. Billionaires John Griffin and James Dinan are among the shareholders holding positions in W. R. Grace & Co, owning 3.19 million shares and 2.16 million shares respectively. Scott McLellan’s Marble Arch Investments sold off the 593,000 shares it held on March 31.

Lastly is Axiall Corp (NYSE:AXLL), a small-cap chemicals company. Hedge fund ownership in the company dipped to 30 from 42 during the second quarter, while their aggregate holdings fell to $656 million from $874 million. Hedge funds appear to have timed their exits well, as Axiall Corp has endured a very rough run since the end of the first quarter, with shares declining by over 44%. Nonetheless, the smart money was still rather bullish overall, with 25.90% ownership of the company’s common shares. Eric Mandelblatt’s Soroban Capital Partners holds a large stake of 5.25 million shares worth $189 million, while Lee Ainslie and David Tepper are among the other investors of the company. Steve Cohen and Glenn Russell Dubin are a couple of the hedge fund managers that sold off their positions in the stock in the second quarter.

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