The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Newmont Corporation (NYSE:NEM).
Newmont Corporation (NYSE:NEM) was in 43 hedge funds’ portfolios at the end of March. The all time high for this statistic is 55. NEM shareholders have witnessed a decrease in hedge fund interest lately. There were 50 hedge funds in our database with NEM holdings at the end of December. Our calculations also showed that NEM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. 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. Now we’re going to check out the fresh hedge fund action encompassing Newmont Corporation (NYSE:NEM).
Do Hedge Funds Think NEM Is A Good Stock To Buy Now?
At the end of March, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. On the other hand, there were a total of 43 hedge funds with a bullish position in NEM a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of Newmont Corporation (NYSE:NEM), with a stake worth $293.1 million reported as of the end of March. Trailing AQR Capital Management was Renaissance Technologies, which amassed a stake valued at $179.9 million. Citadel Investment Group, Two Sigma Advisors, and Adage Capital 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 Heathbridge Capital Management allocated the biggest weight to Newmont Corporation (NYSE:NEM), around 9.18% of its 13F portfolio. Callodine Capital Management is also relatively very bullish on the stock, setting aside 4.84 percent of its 13F equity portfolio to NEM.
Since Newmont Corporation (NYSE:NEM) has experienced a decline in interest from the smart money, logic holds that there lies a certain “tier” of money managers that elected to cut their full holdings last quarter. Interestingly, Charles de Vaulx’s International Value Advisers said goodbye to the biggest investment of the 750 funds followed by Insider Monkey, valued at about $101.3 million in stock, and Richard Driehaus’s Driehaus Capital was right behind this move, as the fund dumped about $54.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 7 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Newmont Corporation (NYSE:NEM) but similarly valued. We will take a look at Monster Beverage Corp (NASDAQ:MNST), Marriott International Inc (NYSE:MAR), Enterprise Products Partners L.P. (NYSE:EPD), Freeport-McMoRan Inc. (NYSE:FCX), Ford Motor Company (NYSE:F), ING Groep N.V. (NYSE:ING), and Dow Inc. (NYSE:DOW). This group of stocks’ market values are similar to NEM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MNST | 45 | 2382495 | 1 |
| MAR | 58 | 3068754 | 0 |
| EPD | 26 | 299289 | -4 |
| FCX | 68 | 3290981 | 7 |
| F | 49 | 2197658 | 8 |
| ING | 10 | 532082 | 1 |
| DOW | 41 | 717981 | -6 |
| Average | 42.4 | 1784177 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.4 hedge funds with bullish positions and the average amount invested in these stocks was $1784 million. That figure was $995 million in NEM’s case. Freeport-McMoRan Inc. (NYSE:FCX) is the most popular stock in this table. On the other hand ING Groep N.V. (NYSE:ING) is the least popular one with only 10 bullish hedge fund positions. Newmont Corporation (NYSE:NEM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NEM is 49.9. 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 positive signal but 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately NEM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NEM were disappointed as the stock returned 4.7% since the end of March (through 6/18) 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 many of these stocks already outperformed the market since 2019.
Follow Newmont Corp (NYSE:NEM)
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Disclosure: None. This article was originally published at Insider Monkey.
