If You Own GrafTech International (EAF) Stock, Should You Sell It Now?

RF Capital Management LLC recently released its Q2 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 18.8% for the second quarter (net of fees), underperforming the S&P 500 Index which returned 20.5% in the same quarter. You should check out RF Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, RF Capital highlighted a few stocks and Graftech International Ltd (NYSE:EAF) is one of them. Graftech International Ltd (NYSE:EAF) is a producer of specialized graphite electrodes. Year-to-date, Graftech International Ltd (NYSE:EAF) stock lost 38.3% and on August 18th it had a closing price of $7.20. Here is what RF Capital said:

“GrafTech International (EAF) – We exited EAF at an average price of $6.60/share. It was a painful decision to sell since we still saw potential upside despite the impact of COVID-19 on the global steel industry. In fact, we sold purely based on technicals, not fundamentals, per our trading framework. While it may seem like a silly rule to sell on negative momentum, we derived the rule from our extensive review of the firm’s trading history since inception. Thus, we adhered to our framework, remained disciplined and exited completely.”


In April, we had published RF Capital’s bullish thesis about Graftech International Ltd (NYSE:EAF) stock in this article.

In Q1 2020, the number of bullish hedge fund positions on Graftech International Ltd (NYSE:EAF) stock decreased by about 30% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with Graftech International’s downside potential. Our calculations showed that Graftech International Ltd (NYSE:EAF) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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