Cliffs Natural Resources Inc (NYSE:CLF) was in 19 hedge funds' portfolio at the end of the first quarter of 2013. CLF has experienced a decrease in support from the world's most elite money managers recently. There were 27 hedge funds in our database with CLF holdings at the end of the previous quarter.
In the eyes of most shareholders, hedge funds are seen as worthless, outdated investment vehicles of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey look at the crème de la crème of this club, about 450 funds. Most estimates calculate that this group oversees most of the smart money's total capital, and by keeping an eye on their best investments, we have unearthed a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, bullish insider trading activity is a second way to break down the world of equities. As the old adage goes: there are plenty of stimuli for an executive to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this tactic if piggybackers know where to look (learn more here).
Consequently, we're going to take a look at the recent action encompassing Cliffs Natural Resources Inc (NYSE:CLF).
At the end of the first quarter, a total of 19 of the hedge funds we track were long in this stock, a change of -30% from the first quarter. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.
Of the funds we track, SAC Capital Advisors, managed by Steven Cohen, holds the most valuable position in Cliffs Natural Resources Inc (NYSE:CLF). SAC Capital Advisors has a $66.7 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Dmitry Balyasny of Balyasny Asset Management, with a $20.4 million position; 0.3% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Ken Griffin's Citadel Investment Group, Ken Griffin's Citadel Investment Group and Israel Englander's Millennium Management.
Seeing as Cliffs Natural Resources Inc (NYSE:CLF) has experienced declining sentiment from hedge fund managers, it's easy to see that there exists a select few hedge funds who sold off their entire stakes at the end of the first quarter. Interestingly, Ken Fisher's Fisher Asset Management dropped the biggest stake of the 450+ funds we key on, totaling close to $32.2 million in stock., and John Burbank of Passport Capital was right behind this move, as the fund cut about $23.7 million worth. These moves are interesting, as total hedge fund interest fell by 8 funds at the end of the first quarter.
Bullish insider trading is best served when the company we're looking at has experienced transactions within the past half-year. Over the last half-year time period, Cliffs Natural Resources Inc (NYSE:CLF) has experienced 1 unique insider buying, and 7 insider sales (see the details of insider trades here).
With the results shown by our strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Cliffs Natural Resources Inc (NYSE:CLF) is no exception.