Is Vale SA (ADR) (VALE) A Good Stock To Buy?

Page 2 of 2

Consequently, specific money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, initiated the biggest position in Vale SA (ADR) (NYSE:VALE). Millennium Management had $30 million invested in the company at the end of the quarter. Alan Howard’s Brevan Howard also initiated a $6.1 million position during the quarter. The other funds with brand new VALE positions are Ken Griffin’s Citadel Investment Group, Benjamin A. Smith’s Laurion Capital Management, and Bart Baum’s Ionic Capital Management.

Let’s go over hedge fund activity in other stocks similar to Vale SA (ADR) (NYSE:VALE). These stocks are General Growth Properties Inc (NYSE:GGP), The Allstate Corporation (NYSE:ALL), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and O’Reilly Automotive Inc (NASDAQ:ORLY). This group of stocks’ market caps resemble VALE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GGP 27 306552 7
ALL 27 1109142 -2
ALXN 42 2107784 -4
ORLY 42 1836056 -2

As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $1.34 billion. That figure was $288 million in VALE’s case. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is the most popular stock in this table. On the other hand General Growth Properties Inc (NYSE:GGP) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Vale SA (ADR) (NYSE:VALE) is even less popular than GGP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None

Page 2 of 2