In the financial world, there are dozens of gauges market participants can use to watch Mr. Market. A pair of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can outperform the broader indices by a significant margin (see just how much).
Just as key, bullish insider trading activity is a second way to look at the stock market universe. As the old adage goes: there are plenty of reasons for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).
Furthermore, it’s important to discuss the recent info about Cloud Peak Energy Inc. (NYSE:CLD).
What have hedge funds been doing with Cloud Peak Energy Inc. (NYSE:CLD)?
At the end of the second quarter, a total of 14 of the hedge funds we track were long in this stock, a change of -13% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings substantially.
Out of the hedge funds we follow, Robert Bishop’s Impala Asset Management had the most valuable position in Cloud Peak Energy Inc. (NYSE:CLD), worth close to $66.7 million, comprising 3.7% of its total 13F portfolio. Sitting at the No. 2 spot is Third Avenue Management, managed by Martin Whitman, which held a $35.4 million position; 0.7% of its 13F portfolio is allocated to the company. Other peers that are bullish include Tom Wagner and Ara Cohen’s Knighthead Capital, Jorge Paulo Lemann’s 3G Capital and Cliff Asness’s AQR Capital Management.
Because Cloud Peak Energy Inc. (NYSE:CLD) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there exists a select few funds that elected to cut their full holdings heading into Q2. At the top of the heap, Robert Bishop’s Impala Asset Management dumped the largest stake of the “upper crust” of funds we key on, worth about $6.3 million in call options., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund said goodbye to about $1.9 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds heading into Q2.
Insider trading activity in Cloud Peak Energy Inc. (NYSE:CLD)
Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest half-year time period, Cloud Peak Energy Inc. (NYSE:CLD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Cloud Peak Energy Inc. (NYSE:CLD). These stocks are Stillwater Mining Company (NYSE:SWC), AMCOL International Corporation (NYSE:ACO), Globe Specialty Metals, Inc. (NASDAQ:GSM), U.S. Silica Holdings Inc (NYSE:SLCA), and Arch Coal Inc (NYSE:ACI). This group of stocks are in the industrial metals & minerals industry and their market caps are closest to CLD’s market cap.