5 Hot South African Mining Stocks That Hedge Funds Love

#3. Sibanye Gold Ltd (ADR) (NYSE:SBGL)

 – Hedge Funds with Long Positions (as of March 31): 9

 – Aggregate Value of Hedge Funds’ Holdings (as of March 31): $723.04 million

Moving on, Sibanye Gold Ltd (ADR) (NYSE:SBGL) saw an increase in its popularity among the hedge funds in our database during the first quarter, with the number of shareholders of the stock rising by four to nine, while the aggregate value of their holdings in it increased by a whopping 4,031%. Founded in November 2012, Sibanye Gold Ltd (ADR) (NYSE:SBGL) is currently the largest individual producer of gold in South Africa and one of the ten largest gold producers in the world. In May, The Financial Times reported that the company’s management was thinking about increasing its exposure to platinum by purchasing platinum assets from debt-ridden mining companies. Though shares of Sibanye Gold ended the second quarter down by over 10%, they are currently trading up by over 176% year-to-date. The company currently pays a quarterly dividend of $0.23 per share, which translates into an annual dividend yield of 2.79%.

#2. Gold Fields Limited (ADR) (NYSE:GFI)

 – Hedge Funds with Long Positions (as of March 31): 21

 – Aggregate Value of Hedge Funds’ Holdings (as of March 31): $418.25 million

Amid a 42.24% rise in its stock during the first quarter, the number of hedge funds that we track long Gold Fields Limited (ADR) (NYSE:GFI) increased by five and the aggregate value of their holdings in the company jumped by $347.78 million. While the 77% gain that shares of Gold Fields Limited (ADR) (NYSE:GFI) registered during the first-half of 2016 were extremely good on a standalone basis, they pale in comparison to the gains made by other stocks in this list. On July 8, analysts at Goldman Sachs released a note in which they upgraded Gold Fields’ stock to ‘Buy’ from ‘Neutral’, citing the company’s ability to consistently generate high free cash flows. They also added that despite the rally the stock has seen so far this year, it could continue to rally going forward and the company can also hike its quarterly dividend in the coming months. Funds that boosted their stake in the company significantly during the first quarter included billionaire Cliff Asness‘ AQR Capital Management, which hiked its holding by 3,730% to almost 4.2 million shares.

#1. AngloGold Ashanti Limited (ADR) (NYSE:AU)

 – Hedge Funds with Long Positions (as of March 31): 24

 – Aggregate Value of Hedge Funds’ Holdings (as of March 31): $590 million

The largest South African gold mining company in terms of market capitalization also turned out to be the most popular South African mining stock among the hedge funds in our system as of March 31. During the March quarter, ownership of AngloGold Ashanti Limited (ADR) (NYSE:AU) among those funds increased by five and the combined value of their AngloGold holdings jumped by $261.5 million. However, there were also a few funds that reduced their stake in the company during that time, including John Burbank‘s Passport Capital, which cut its holding by half to 6.34 million shares. AngloGold Ashanti Limited (ADR) (NYSE:AU)’s stock ended the second quarter with a gain of 32% and is currently trading up by 200% year-to-date. Despite this two-fold increase in the stock’s price and the fact that the company is among the most leveraged gold miners, with a debt-to-asset ratio of 38%, a few analysts feel that the stock is still relatively undervalued compared to its peers, as it currently trades at a forward P/E of 19 and price-to-sales ratio of 2.14. On July 6, analysts at Deutsche Bank downgraded the stock to ‘Hold’ from ‘Buy’.

Disclosure: None