Alluvium Asset Management, an asset management company, released its “Conventum – Alluvium Global Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The equity market continued its rally in the third quarter. The Fund was up 4.3%, 8.7% and 4.6% in EUR, USD and AUD terms, in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Conventum – Alluvium Global Fund highlighted stocks like Agnico Eagle Mines Limited (NYSE:AEM), in the third quarter 2024 investor letter. Agnico Eagle Mines Limited (NYSE:AEM) is a gold mining company. The one-month return of Agnico Eagle Mines Limited (NYSE:AEM) was 3.39%, and its shares gained 62.46% of their value over the last 52 weeks. On December 3, 2024, Agnico Eagle Mines Limited (NYSE:AEM) stock closed at $85.99 per share with a market capitalization of $43.206 billion.
Conventum – Alluvium Global Fund stated the following regarding Agnico Eagle Mines Limited (NYSE:AEM) in its Q3 2024 investor letter:
“Our gold miners performed quite well. Agnico Eagle Mines Limited (NYSE:AEM) was up 22.4%, and Regis Resources was up 16.2%. Moving on to Agnico Eagle, its update was all positive, and included promising expansion plans for existing assets. Unlike Regis, there was no reason for its share price not to respond to the favourable conditions in the direct gold markets. However, over the course of our ownership (originally in Kirkland Lake which then merged with Agnico), our investment has moved more toward exploration from operations. Whilst we like upside, and there is no doubt the Agnico management team have executed well and are likely to continue to do so, this was never the main game when it came to our investment in Kirkland Lake in mid 2020. So, it no longer meets our original investment thesis, nor our refined investment philosophy. This is perhaps best illustrated by our earnings based valuation approach. We updated our gold price and exchange rate assumptions leading to higher maintainable earnings estimates, and we adjusted our discount rate to reflect higher growth prospects and increased confidence in management. And our valuation increased by 47%. However it is still barely half the current share price. Accordingly, we sold our position.
So, we no longer invest in any gold miners. The timing of our Regis sale was not great as we missed a subsequent 26.7% rally to the end of the quarter. However, the decision to sell was the right one. This is an example that one should not judge the quality of a decision by its outcome. Net-net the Fund’s total return over its holding period for the gold miners was disappointing, as our 82.8% capital return from Agnico was almost completely wiped out by our 39.8% capital loss from Regis.”
A macro view of a gold mine, with miners hard at work in the foreground.
Agnico Eagle Mines Limited (NYSE:AEM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Agnico Eagle Mines Limited (NYSE:AEM) at the end of the third quarter which was 50 in the previous quarter. While we acknowledge the potential of Agnico Eagle Mines Limited (NYSE:AEM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Agnico Eagle Mines Limited (NYSE:AEM) and shared the list of high growth large cap stocks to buy. Conventum – Alluvium Global Fund stated in Q2 2024 investor letter that Agnico Eagle Mines Limited (NYSE:AEM) rose by 1.4% and was trading at a premium to its valuation. The fund reported last quarter that the stock rose by 6% and is currently trading at a premium compared to our valuation. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.