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Teck Resources Ltd (USA) (TCK): Are Hedge Funds Right About This Stock?

With a general bullishness amongst the heavyweights, key hedge funds have jumped into Teck Resources Ltd (USA) (NYSE:TCK) headfirst. Tyrus Capital, managed by Tony Chedraoui, established the biggest call position in Teck Resources Ltd (USA) (NYSE:TCK). Tyrus Capital had $9.6 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated an $8.6 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Don Morgan’s Brigade Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Teck Resources Ltd (USA) (NYSE:TCK) but similarly valued. We will take a look at Telephone & Data Systems, Inc. (NYSE:TDS), Ascena Retail Group Inc (NASDAQ:ASNA), Crane Co. (NYSE:CR), and Thor Industries, Inc. (NYSE:THO). This group of stocks’ market valuations are closest to TCK’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TDS 24 287537 -1
ASNA 23 472622 -2
CR 21 267772 -2
THO 21 232892 3

As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $315 million. That figure was $47 million in TCK’s case. Telephone & Data Systems, Inc. (NYSE:TDS) is the most popular stock in this table. On the other hand Crane Co. (NYSE:CR) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Teck Resources Ltd (USA) (NYSE:TCK) is even less popular than CR. 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.

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