Novacopper Inc (NCQ): Are Hedge Funds Right About This Stock?

Novacopper Inc (NYSEAMEX:NCQ)Novacopper Inc (NYSEAMEX:NCQ) investors should be aware of a decrease in hedge fund sentiment lately.

In the financial world, there are tons of methods market participants can use to track publicly traded companies. Some of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can beat the S&P 500 by a significant margin (see just how much).

Just as integral, positive insider trading sentiment is a second way to parse down the marketplace. Just as you’d expect, there are many motivations for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).

Consequently, it’s important to take a gander at the key action regarding Novacopper Inc (NYSEAMEX:NCQ).

How are hedge funds trading Novacopper Inc (NYSEAMEX:NCQ)?

Heading into 2013, a total of 7 of the hedge funds we track were bullish in this stock, a change of -13% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, John Paulson’s Paulson & Co had the most valuable position in Novacopper Inc (NYSEAMEX:NCQ), worth close to $10.7 million, comprising 0.1% of its total 13F portfolio. On Paulson & Co’s heels is Baupost Group, managed by Seth Klarman, which held a $9.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include James Dinan’s York Capital Management, D. E. Shaw’s D E Shaw and Jim Simons’s Renaissance Technologies.

Due to the fact that Novacopper Inc (NYSEAMEX:NCQ) has faced falling interest from the aggregate hedge fund industry, logic holds that there were a few funds that decided to sell off their positions entirely in Q4. Intriguingly, Peter J. Eichler Jr.’s Aletheia Research and Management said goodbye to the largest stake of all the hedgies we monitor, worth about $5.1 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund cut about <$1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 funds in Q4.

How have insiders been trading Novacopper Inc (NYSEAMEX:NCQ)?

Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the last six-month time frame, Novacopper Inc (NYSEAMEX:NCQ) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Novacopper Inc (NYSEAMEX:NCQ). These stocks are Avalon Rare Metals Inc (US listing) (NYSEAMEX:AVL), United States Antimony Corporation (NYSEAMEX:UAMY), Rare Element Resources Ltd (NYSEAMEX:REE), and Uranerz Energy Corp. (NYSEAMEX:URZ). All of these stocks are in the industrial metals & minerals industry and their market caps resemble NCQ’s market cap.