Should You Follow Hedge Funds Out Of ArcelorMittal SA (ADR) (MT)?

Judging by the fact that ArcelorMittal SA (ADR) (NYSE:MT) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds that elected to cut their positions entirely by the end of the third quarter. Intriguingly, Christopher A. Winham’s Tide Point Capital sold off the largest investment of the “upper crust” of funds watched by Insider Monkey, worth close to $16.3 million in call options (as mentioned, Tide Point did retain its long position). Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also cut its stock, about $9.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as ArcelorMittal SA (ADR) (NYSE:MT) but similarly valued. We will take a look at MPLX LP (NYSE:MPLX), KLA-Tencor Corporation (NASDAQ:KLAC), Waters Corporation (NYSE:WAT), and Coach, Inc. (NYSE:COH). This group of stocks’ market caps match MT’s market cap.

As you can see these stocks had an average of 30.25 hedge funds with bullish positions and the average amount invested in these stocks was $520 million. That figure was $227 million in MT’s case. KLA-Tencor Corporation (NASDAQ:KLAC) is the most popular stock in this table. On the other hand MPLX LP (NYSE:MPLX) is the least popular one with only 14 bullish hedge fund positions. ArcelorMittal SA (ADR) (NYSE:MT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard KLAC might be a better candidate to consider a long position in.

Disclosure: None