Is Cliffs Natural Resources Inc (NYSE:CLF) undervalued? Investors who are in the know are becoming hopeful. The number of bullish hedge fund positions went up by 1 in recent months.
If you’d ask most shareholders, hedge funds are viewed as unimportant, outdated financial vehicles of the past. While there are over 8000 funds trading at present, we at Insider Monkey choose to focus on the elite of this club, about 450 funds. It is widely believed that this group has its hands on most of the hedge fund industry’s total asset base, and by keeping an eye on their top equity investments, we have found a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as key, positive insider trading sentiment is another way to break down the investments you’re interested in. There are many motivations for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers understand what to do (learn more here).
Now, we’re going to take a look at the key action surrounding Cliffs Natural Resources Inc (NYSE:CLF).
Hedge fund activity in Cliffs Natural Resources Inc (NYSE:CLF)
In preparation for this year, a total of 23 of the hedge funds we track were long in this stock, a change of 5% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings significantly.
According to our comprehensive database, SAC Capital Advisors, managed by Steven Cohen, holds the most valuable position in Cliffs Natural Resources Inc (NYSE:CLF). SAC Capital Advisors has a $116 million billion position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $48 million call position; 0.9% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Ken Fisher’s Fisher Asset Management, and Dmitry Balyasny’s Balyasny Asset Management.
Consequently, some big names have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, initiated the most outsized position in Cliffs Natural Resources Inc (NYSE:CLF). Alyeska Investment Group had 19 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $5 million position during the quarter. The following funds were also among the new CLF investors: Glenn Russell Dubin’s Highbridge Capital Management, Michael Novogratz’s Fortress Investment Group, and Chuck Royce’s Royce & Associates.
What have insiders been doing with Cliffs Natural Resources Inc (NYSE:CLF)?
Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past 180 days. Over the last six-month time period, Cliffs Natural Resources Inc (NYSE:CLF) has experienced 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
With the results shown by the aforementioned time-tested strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Cliffs Natural Resources Inc (NYSE:CLF) is an important part of this process.
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