Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Southern Copper Corporation (NYSE:SCCO) based on that data.
Is Southern Copper Corporation (NYSE:SCCO) a healthy stock for your portfolio? Prominent investors were buying. The number of bullish hedge fund bets increased by 4 lately. Southern Copper Corporation (NYSE:SCCO) was in 27 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SCCO isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 23 hedge funds in our database with SCCO positions at the end of the fourth quarter.
In the eyes of most investors, hedge funds are viewed as slow, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at present, Our experts choose to focus on the bigwigs of this group, around 850 funds. It is estimated that this group of investors orchestrate the majority of the smart money's total asset base, and by following their first-class stock picks, Insider Monkey has identified many investment strategies that have historically outperformed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let's take a peek at the fresh hedge fund action encompassing Southern Copper Corporation (NYSE:SCCO).
Do Hedge Funds Think SCCO Is A Good Stock To Buy Now?
At the end of March, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in SCCO a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Southern Copper Corporation (NYSE:SCCO), with a stake worth $270.7 million reported as of the end of March. Trailing Fisher Asset Management was Arrowstreet Capital, which amassed a stake valued at $160.6 million. Millennium Management, D E Shaw, and Capital Growth Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Capital Growth Management allocated the biggest weight to Southern Copper Corporation (NYSE:SCCO), around 2.08% of its 13F portfolio. Quantamental Technologies is also relatively very bullish on the stock, dishing out 1.11 percent of its 13F equity portfolio to SCCO.
As one would reasonably expect, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the most outsized position in Southern Copper Corporation (NYSE:SCCO). Millennium Management had $37 million invested in the company at the end of the quarter. Ken Heebner's Capital Growth Management also made a $22.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Gelband's ExodusPoint Capital, Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, and Qing Li's Sciencast Management.
Let's check out hedge fund activity in other stocks – not necessarily in the same industry as Southern Copper Corporation (NYSE:SCCO) but similarly valued. These stocks are The Blackstone Group Inc. (NYSE:BX), Moderna, Inc. (NASDAQ:MRNA), Edwards Lifesciences Corporation (NYSE:EW), Honda Motor Co Ltd (NYSE:HMC), Vodafone Group Plc (NASDAQ:VOD), Aon plc (NYSE:AON), and Koninklijke Philips NV (NYSE:PHG). This group of stocks' market values are closest to SCCO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BX,49,1626408,-5 MRNA,39,1640099,-2 EW,36,1462451,-2 HMC,12,432850,0 VOD,17,775060,0 AON,72,7767726,9 PHG,11,104193,3 Average,33.7,1972684,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.7 hedge funds with bullish positions and the average amount invested in these stocks was $1973 million. That figure was $590 million in SCCO's case. Aon plc (NYSE:AON) is the most popular stock in this table. On the other hand Koninklijke Philips NV (NYSE:PHG) is the least popular one with only 11 bullish hedge fund positions. Southern Copper Corporation (NYSE:SCCO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SCCO is 52.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and surpassed the market again by 6.7 percentage points. Unfortunately SCCO wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SCCO investors were disappointed as the stock returned -3.1% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.