Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
Is Teck Resources Ltd (USA) (NYSE:TCK) ready to rally soon? Money managers are in a bullish mood. The number of long hedge fund bets moved up by 4 recently. TCK was in 19 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with TCK holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Telephone & Data Systems, Inc. (NYSE:TDS), Ascena Retail Group Inc (NASDAQ:ASNA), and Crane Co. (NYSE:CR) to gather more data points.
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Keeping this in mind, let’s check out the latest action surrounding Teck Resources Ltd (USA) (NYSE:TCK).
How have hedgies been trading Teck Resources Ltd (USA) (NYSE:TCK)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Tyrus Capital, managed by Tony Chedraoui, holds the biggest position in Teck Resources Ltd (USA) (NYSE:TCK). Tyrus Capital has an $9.6 million call position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is Luminus Management, managed by Jonathan Barrett and Paul Segal, which holds an $9.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Other peers that hold long positions comprise Daniel S. Och’s OZ Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and John A. Levin’s Levin Capital Strategies.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Teck Resources Ltd (USA) (NYSE:TCK) headfirst. Tyrus Capital, managed by Tony Chedraoui, established the biggest call position in Teck Resources Ltd (USA) (NYSE:TCK). Tyrus Capital had $9.6 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated an $8.6 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Don Morgan’s Brigade Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Teck Resources Ltd (USA) (NYSE:TCK) but similarly valued. We will take a look at Telephone & Data Systems, Inc. (NYSE:TDS), Ascena Retail Group Inc (NASDAQ:ASNA), Crane Co. (NYSE:CR), and Thor Industries, Inc. (NYSE:THO). This group of stocks’ market valuations are closest to TCK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TDS | 24 | 287537 | -1 |
| ASNA | 23 | 472622 | -2 |
| CR | 21 | 267772 | -2 |
| THO | 21 | 232892 | 3 |
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $315 million. That figure was $47 million in TCK’s case. Telephone & Data Systems, Inc. (NYSE:TDS) is the most popular stock in this table. On the other hand Crane Co. (NYSE:CR) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Teck Resources Ltd (USA) (NYSE:TCK) is even less popular than CR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
