Morning Market Losers: MBIA Inc. (MBI), Peabody Energy Corporation (BTU) & Vale SA (ADR) (VAL)

Peabody Energy Corporation (NYSE:BTU) has lost more than 70% so far this year and over 85% in the past 12 months. The number of hedge funds holding long positions in the stock fell heavily during the first quarter, to 19 at the end of the first trimester, from 29 at the end of the fourth quarter. However, the overall capital invested by the hedge funds dropped just $13.9 million to $225.96 million, just a 5.8% drop while the stock lost more than 36% of its value during the first three months. This shows that the hedge funds were not completely bearish on the stock. Especially, Dmitry Balyasny‘s Balyasny Asset Management initiated the largest position in the stock by buying 27.31 million shares, valued at $134.34 million at the end of March. Hedge funds managed by top managers like Jim Simons and Ken Griffin have increased their position in the stock during the first three months of the year as well.

Vale SA (ADR) (NYSE:VAL)’s stock had a huge dip in the first quarter as well, as it lost around 30% of its value in the January – March period. While the stock had gained back the lost value by early May, it has slid right back down near its 52-week low since, having dropped around 30% since then and over 4% today. Heading into the second quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 12% from the end of the fourth quarter. Hedge funds’ collective investment in the stock decreased by around 26% compared to a 30% drop in the value of the stock during the first trimester, indicating that hedge funds weren’t completely fleeing the stock, but that their positions eroded in value from the value of the stock itself. Notably, James Dinan‘s York Capital Management opened up the largest ‘Call’ position in the stock during the first quarter, worth around $23.6 million at the end of March. On the contrary, Michael Hintze‘s CQS Cayman LP said goodbye to the stock by selling the 2.3 million shares it once held, during the first three months of the year.

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