Singer's Elliott Management, Greenlight Cash In on Alcoa's Rally

  • Hedge funds ‘made a ton of money’ from Alcoa stake: Cosgrove
  • Renaissance Technologies pares stake by 29%, filing shows

Hedge funds pared their holdings in Alcoa Corp. before shares in the largest U.S. aluminum producer retreated from a nine-year high.

Last quarter, Paul Singer’s Elliott Management Corp., Alcoa’s second-largest shareholder, and Renaissance Technologies LLC each cut their stake by 29 percent, while Greenlight Capital LLC, the hedge fund firm led by David Einhorn, sold all of its holdings, regulatory filings this week showed.

Investors have benefited as Alcoa shares climbed this year, buoyed by the rally in aluminum. In the case of Greenlight, share prices averaged just $24.12 in the fourth quarter of 2016, when the hedge fund acquired its stake. By the end of the third quarter, when Greenlight exited, the average was $40.31, or 67 percent higher.

“That’s a good tactical call,” Andrew Cosgrove, an analyst at Bloomberg Intelligence said in a telephone interview. “They made a ton of money from that and called it a day. I don’t think any of those moves mark any fundamental shift” in Alcoa’s outlook, he said.

Alcoa surged 43 percent last quarter. The stock has slipped 16 percent since Oct. 24, when it reached $50.31, the highest since 2008.

Filings released this month do not include hedge funds’ current position, which may have changed since the end of the quarter. Money managers who oversee more than $100 million in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds.

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