Molycorp Inc (MCP): What Should You Do Now?

Page 1 of 8

Molycorp Inc (NYSE:MCP)Molycorp Inc (NYSE:MCP) was in 14 hedge funds’ portfolio at the end of the fourth quarter of 2012. MCP investors should pay attention to a decrease in hedge fund sentiment recently. There were 23 hedge funds in our database with MCP holdings at the end of the previous quarter.

At the moment, there are a multitude of gauges investors can use to monitor stocks. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce the S&P 500 by a superb margin (see just how much).

Equally as important, optimistic insider trading activity is a second way to break down the world of equities. Just as you’d expect, there are lots of reasons for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).

With these “truths” under our belt, let’s take a look at the key action encompassing Molycorp Inc (NYSE:MCP).

What have hedge funds been doing with Molycorp Inc (NYSE:MCP)?

At year’s end, a total of 14 of the hedge funds we track were bullish in this stock, a change of -39% from the third quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Blue Ridge Capital, managed by John Griffin, holds the most valuable position in Molycorp Inc (NYSE:MCP). Blue Ridge Capital has a $27 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $3.3 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Himanshu H. Shah’s Shah Capital Management, Phil Frohlich’s Prescott Group Capital Management and Ken Griffin’s Citadel Investment Group.

Due to the fact that Molycorp Inc (NYSE:MCP) has faced bearish sentiment from hedge fund managers, logic holds that there was a specific group of funds who sold off their positions entirely at the end of the year. Intriguingly, Peter J. Eichler Jr.’s Aletheia Research and Management sold off the biggest investment of all the hedgies we track, worth about $30.2 million in stock., and Philippe Laffont of Coatue Management was right behind this move, as the fund cut about $23.5 million worth. These transactions are interesting, as total hedge fund interest fell by 9 funds at the end of the year.

Insider trading activity in Molycorp Inc (NYSE:MCP)

Insider purchases made by high-level executives is best served when the company in question has seen transactions within the past half-year. Over the latest 180-day time period, Molycorp Inc (NYSE:MCP) has seen 6 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Molycorp Inc (NYSE:MCP). These stocks are Denison Mines Corp (USA) (NYSEAMEX:DNN), Taseko Mines Limited (USA) (NYSEAMEX:TGB), Thompson Creek Metals Company Inc (USA) (NYSE:TC), Hi-Crush Partners LP (NYSE:HCLP), and HORSEHEAD HOLDING CORP. (NASDAQ:ZINC). All of these stocks are in the industrial metals & minerals industry and their market caps are similar to MCP’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Denison Mines Corp (USA) (NYSEAMEX:DNN) 7 0 0
Taseko Mines Limited (USA) (NYSEAMEX:TGB) 2 0 0
Thompson Creek Metals Company Inc (USA) (NYSE:TC) 10 3 0
Hi-Crush Partners LP (NYSE:HCLP) 2 1 0
HORSEHEAD HOLDING CORP. (NASDAQ:ZINC) 10 1 0

With the returns shown by Insider Monkey’s time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Molycorp Inc (NYSE:MCP) is an important part of this process.

See the 7 most bullish money managers:

Page 1 of 8
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!