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Hedge Funds Cutting Exposure To Southern Copper Corporation (SCCO)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Southern Copper Corporation (NYSE:SCCO) based on that data.

Southern Copper Corporation (NYSE:SCCO) has seen a decrease in support from the world’s most elite money managers in recent months. SCCO was in 19 hedge funds’ portfolios at the end of March. There were 20 hedge funds in our database with SCCO holdings at the end of the previous quarter. Our calculations also showed that SCCO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most traders, hedge funds are perceived as slow, outdated financial tools of yesteryear. While there are greater than 8000 funds trading today, Our researchers choose to focus on the top tier of this group, approximately 850 funds. It is estimated that this group of investors shepherd the majority of the smart money’s total capital, and by shadowing their highest performing picks, Insider Monkey has discovered various investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Lee Ainslie MAVERICK CAPITAL

Lee Ainslie of Maverick Capital

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the latest hedge fund action regarding Southern Copper Corporation (NYSE:SCCO).

Hedge fund activity in Southern Copper Corporation (NYSE:SCCO)

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in SCCO over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the biggest position in Southern Copper Corporation (NYSE:SCCO), worth close to $95.9 million, comprising 0.1% of its total 13F portfolio. Coming in second is Jeremy Hosking of Hosking Partners, with a $7.7 million position; 0.3% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Cliff Asness’s AQR Capital Management, Renaissance Technologies and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Hosking Partners allocated the biggest weight to Southern Copper Corporation (NYSE:SCCO), around 0.27% of its 13F portfolio. CSat Investment Advisory is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to SCCO.

Because Southern Copper Corporation (NYSE:SCCO) has experienced declining sentiment from the smart money, it’s safe to say that there exists a select few hedge funds that decided to sell off their positions entirely by the end of the first quarter. Interestingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest investment of the “upper crust” of funds watched by Insider Monkey, worth close to $0.8 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund sold off about $0.7 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds by the end of the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Southern Copper Corporation (NYSE:SCCO) but similarly valued. These stocks are Amphenol Corporation (NYSE:APH), Dow Inc. (NYSE:DOW), Otis Worldwide Corporation (NYSE:OTIS), and FirstEnergy Corp. (NYSE:FE). All of these stocks’ market caps are closest to SCCO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
APH 42 604137 6
DOW 38 375922 4
OTIS 4 13927 4
FE 44 1209775 4
Average 32 550940 4.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $551 million. That figure was $134 million in SCCO’s case. FirstEnergy Corp. (NYSE:FE) is the most popular stock in this table. On the other hand Otis Worldwide Corporation (NYSE:OTIS) is the least popular one with only 4 bullish hedge fund positions. Southern Copper Corporation (NYSE:SCCO) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on SCCO as the stock returned 33.8% during the second quarter and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.