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Arch gets hedge fund attention after emergence from bankruptcy

Hedge funds offered new interest in Arch Coal Inc. in the weeks after the coal producer emerged from bankruptcy, though few other major U.S. producers enjoyed notable attention.

According to an analysis of quarterly Form 13F filings by prominent funds with the SEC, two funds ended the fourth quarter of 2016 with more than a million total shares of the newly emergent coal producer, with Point72 Asset Management LP taking on 229,690 shares and Citadel Advisors LLC wrapping up the period with more than 800,000 shares.

Arch emerged from reorganization just days into the fourth quarter, returning to the NYSE on Oct. 5, 2016, under the symbol ARCH. The company's return to the market offered investors "one of the few ways to invest in met coal in public markets today," FBR & Co. analyst Lucas Pipes noted at the time.

A little more than a month later, coal company shares rallied following the presidential victory of Republican Donald Trump, who had pledged broad support for the industry on the campaign trail.

Shortly after Trump's surprise victory, coal company shares began climbing after years of steady decline, even as the wider market faced short-term volatility following the announcement of Trump's win over Democrat Hillary Clinton.

Arch finished the final quarter of the year with a net income of $33.4 million.

The Chicago-based Citadel also increased its holdings in CONSOL Energy Inc., ending the period with 391,700 shares, but decreased its stakes in Westmoreland Coal Co. and Teck Resources Ltd., with the latter falling from about 1.4 million shares in the third quarter to 448,066 shares in the final period of the year.

Point72 Asset Management LP, formerly known as SAC Capital Advisors LLC, ended the year with a reduced stake in CONSOL and no shares of Teck after holding 181,900 shares of the Canada-based company in the previous quarter.

Greenwich, Conn.-based Tudor Investment Corp. reduced its stake in CONSOL and Westmoreland as well, but took on 11,354 shares of Cloud Peak Energy Inc. during the period.

Highbridge Capital Management LLC, a fund majority-owned by JPMorgan Chase & Co. unit JPMorgan Asset Management Ltd., reported a slight decrease in CONSOL shares, but took on 207,389 shares of Cloud Peak. The fund also ended the period with 17,082 shares of Hallador Energy Co. and no shares of Westmoreland after holding 43,201 shares in the previous period.

Two of the funds that held coal shares in past quarters reported owning no coal equities as of the end of the period: Paulson & Co. Inc. and Soros Fund Management LLC, controlled by billionaire George Soros.