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How Do Hedge Funds Feel About AK Steel Holding Corporation (AKS)?

After several tireless days we have finished crunching the numbers from more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards AK Steel Holding Corporation (NYSE:AKS).

AK Steel Holding Corporation (NYSE:AKS) has experienced a decrease in activity from the world’s largest hedge funds lately. At the end of this article, we will also compare AKS to other stocks, including Ascendis Pharma A/S (NASDAQ:ASND), Tredegar Corporation (NYSE:TG), and Moneygram International Inc (NYSE:MGI) to get a better sense of its popularity.

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To most shareholders, hedge funds are seen as slow, old investment tools of years past. While there are greater than 8000 funds in operation at present, our researchers hone in on the aristocrats of this group, around 700 funds. These hedge fund managers shepherd the majority of all hedge funds’ total asset base, and by tailing their top equity investments, Insider Monkey has uncovered a number of investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, we’re going to analyze the fresh action encompassing AK Steel Holding Corporation (NYSE:AKS).

How are hedge funds trading AK Steel Holding Corporation (NYSE:AKS)?

At the end of September, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 5% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Kurt Billick’s Bocage Capital has the most valuable CALL position in AK Steel Holding Corporation (NYSE:AKS), worth close to $14.2 million, corresponding to 8.5% of its total 13F portfolio. On Bocage Capital’s heels is Kenneth Tropin of Graham Capital Management, with a $10.4 million position; 1.2% of its 13F portfolio is allocated to the stock. The remaining members of the smart money that hold long positions include Israel Englander’s Millennium Management, D E Shaw and Chuck Royce’s Royce & Associates.

Because AK Steel Holding Corporation (NYSE:AKS) has witnessed falling interest from hedge fund managers, it’s easy to see that there were a few hedgies that elected to cut their positions entirely heading into Q4. Interestingly, Dmitry Balyasny’s Balyasny Asset Management cut the biggest stake of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $22.7 million in stock, and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dropped about $18.4 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 fund heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to AK Steel Holding Corporation (NYSE:AKS). We will take a look at Ascendis Pharma A/S (NASDAQ:ASND), Tredegar Corporation (NYSE:TG), Moneygram International Inc (NYSE:MGI), and Crestwood Equity Partners LP (NYSE:CEQP). This group of stocks’ market values is similar to Eastern Company (NASDAQ:EML)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASND 13 91218 -6
TG 7 64292 -2
MGI 13 81088 2
CEQP 6 991 0

As you can see, these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $53 million in Eastern Company (NASDAQ:EML)’s case. Ascendis Pharma and Moneygramm International are the most popular stocks in this table with 13 funds holding stakes. Compared to these stocks, AK Steel Holding Corporation (NYSE:AKS) is more popular among hedge funds and considering that they are fond of the stock, it might be worth your attention.

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