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).
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 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.
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