Is SunCoke Energy, Inc (SXC) A Good Stock To Buy?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards SunCoke Energy, Inc (NYSE:SXC) .

Is SunCoke Energy, Inc (NYSE:SXC) a buy here? Hedge funds are undoubtedly reducing their bets on the stock. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings retreated by 4 recently. SXC was in 14 hedge funds’ portfolios at the end of the third quarter of 2016. There were 18 hedge funds in our database with SXC holdings at the end of the previous quarter. At the end of this article we will also compare SXC to other stocks including InnerWorkings, Inc. (NASDAQ:INWK), Chromcraft Revington, Inc. (NYSEAMEX:CRC), and Cobalt International Energy, Inc. (NYSE:CIE) 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, we’re going to take a look at the key action regarding SunCoke Energy, Inc (NYSE:SXC).

What does the smart money think about SunCoke Energy, Inc (NYSE:SXC)?

Heading into the fourth quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 22% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SXC over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Nathaniel August’s Mangrove Partners has the largest position in SunCoke Energy, Inc (NYSE:SXC), worth close to $65.2 million, comprising 15.2% of its total 13F portfolio. Coming in second is D. E. Shaw’s D E Shaw, holding a $21.6 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions include Michael Blitzer’s Kingstown Capital Management, Jim Simons’s Renaissance Technologies and Jeffrey Gendell’s Tontine Asset Management. We should note that Mangrove Partners is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. Interestingly, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising about $2.7 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also dropped its stock, about $0.2 million worth of SXC shares.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as SunCoke Energy, Inc (NYSE:SXC) but similarly valued. These stocks are InnerWorkings, Inc. (NASDAQ:INWK), Chromcraft Revington, Inc. (NYSEAMEX:CRC), Cobalt International Energy, Inc. (NYSE:CIE), and CalAmp Corp. (NASDAQ:CAMP). This group of stocks’ market values resemble SXC’s market value.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $134 million. That figure was $158 million in SXC’s case. Chromcraft Revington, Inc. (NYSEAMEX:CRC) is the most popular stock in this table. On the other hand CalAmp Corp. (NASDAQ:CAMP) is the least popular one with only 11 bullish hedge fund positions. SunCoke Energy, Inc (NYSE:SXC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CRC might be a better candidate to consider taking a long position in.

Disclosure: none.