The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Cliffs Natural Resources Inc (NYSE:CLF).
Is Cliffs Natural Resources Inc (NYSE:CLF) a superb investment now? Prominent investors are turning bullish. The number of long hedge fund bets rose by 2 lately. CLF was in 23 hedge funds’ portfolios at the end of the third quarter of 2016. There were 21 hedge funds in our database with CLF holdings at the end of the previous quarter. At the end of this article we will also compare CLF to other stocks including Advantage Oil & Gas Ltd (USA) (NYSE:AAV), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), and ESCO Technologies Inc. (NYSE:ESE) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
With all of this in mind, let’s take a look at the latest action surrounding Cliffs Natural Resources Inc (NYSE:CLF).
Hedge fund activity in Cliffs Natural Resources Inc (NYSE:CLF)
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, up 10% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the number one position in Cliffs Natural Resources Inc (NYSE:CLF), worth close to $91.3 million and corresponding to 0.3% of its total 13F portfolio. The second most bullish fund manager is Jim Simons’ Renaissance Technologies holding a $66.4 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish comprise D. E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group.
Now, key money managers have jumped into Cliffs Natural Resources Inc (NYSE:CLF) headfirst. Omega Advisors, managed by Leon Cooperman, initiated the most outsized position in Cliffs Natural Resources Inc (NYSE:CLF). Omega Advisors had $6.7 million invested in the company at the end of the quarter. Mike Masters’s Masters Capital Management also initiated a $5.9 million position during the quarter. The other funds with brand new CLF positions are Mike Masters’s Masters Capital Management, Steven Tananbaum’s GoldenTree Asset Management, and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cliffs Natural Resources Inc (NYSE:CLF) but similarly valued. These stocks are Advantage Oil & Gas Ltd (USA) (NYSE:AAV), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), ESCO Technologies Inc. (NYSE:ESE), and Hollysys Automation Technologies Ltd (NASDAQ:HOLI). This group of stocks’ market caps match CLF’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was an impressive $266 million in CLF’s case. Hollysys Automation Technologies Ltd (NASDAQ:HOLI) is the most popular stock in this table. On the other hand ESCO Technologies Inc. (NYSE:ESE) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Cliffs Natural Resources Inc (NYSE:CLF) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.