Arch Coal Inc (NYSE:ACI) investors should be aware of a decrease in activity from the world’s largest hedge funds lately.
In today’s marketplace, there are tons of indicators market participants can use to analyze stocks. Some of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outclass their index-focused peers by a superb amount (see just how much).
Just as beneficial, optimistic insider trading activity is another way to parse down the investments you’re interested in. There are a variety of incentives for an insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).
Keeping this in mind, we’re going to take a glance at the recent action regarding Arch Coal Inc (NYSE:ACI).
What have hedge funds been doing with Arch Coal Inc (NYSE:ACI)?
At Q1’s end, a total of 20 of the hedge funds we track held long positions in this stock, a change of -26% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly.
Of the funds we track, Jeffrey Vinik’s Vinik Asset Management had the biggest position in Arch Coal Inc (NYSE:ACI), worth close to $34.7 million, accounting for 1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $23.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and T Boone Pickens’s BP Capital.
Judging by the fact that Arch Coal Inc (NYSE:ACI) has witnessed a declination in interest from the smart money, logic holds that there is a sect of fund managers that elected to cut their entire stakes at the end of the first quarter. It’s worth mentioning that Israel Englander’s Millennium Management dumped the largest investment of the 450+ funds we key on, valued at about $32.3 million in stock., and George Soros of Soros Fund Management was right behind this move, as the fund sold off about $19 million worth. These moves are important to note, as total hedge fund interest was cut by 7 funds at the end of the first quarter.
What have insiders been doing with Arch Coal Inc (NYSE:ACI)?
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last 180-day time period, Arch Coal Inc (NYSE:ACI) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Arch Coal Inc (NYSE:ACI). These stocks are Stillwater Mining Company (NYSE:SWC), AMCOL International Corporation (NYSE:ACO), Globe Specialty Metals, Inc. (NASDAQ:GSM), U.S. Silica Holdings Inc (NYSE:SLCA), and Cloud Peak Energy Inc. (NYSE:CLD). This group of stocks are the members of the industrial metals & minerals industry and their market caps resemble ACI’s market cap.