Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility and underperformance. The time period between the end of June 2015 and the end of June 2016 was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have been underperforming the large-cap indices. However, things have dramatically changed over the last 5 months. Small-cap stocks reversed their misfortune and beat the large cap indices by almost 11 percentage points since the end of June. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of ArcelorMittal SA (ADR) (NYSE:MT).
Is ArcelorMittal SA (ADR) (NYSE:MT) a marvelous stock to buy now? Investors who are in the know are taking a pessimistic view. The number of long hedge fund positions decreased by 6 recently. At the end of this article we will also compare MT to other stocks including MPLX LP (NYSE:MPLX), KLA-Tencor Corporation (NASDAQ:KLAC), and Waters Corporation (NYSE:WAT) 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.
What does the smart money think about ArcelorMittal SA (ADR) (NYSE:MT)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 24% drop from the second quarter of 2016. Sentiment shifted swiftly, after a large spike in hedge fund ownership in the first-half of this year. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the number one position in ArcelorMittal SA (ADR) (NYSE:MT), worth close to $42.1 million. On Renaissance Technologies’ heels is NWI Management, led by Hari Hariharan, holding a $35.8 million position; 3.8% of its 13F portfolio is allocated to the company. Some other peers that hold long positions comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Christopher A. Winham’s Tide Point Capital, and D E Shaw.