The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtSandstorm Gold Ltd. (NYSE:SAND) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Sandstorm Gold Ltd. (NYSE:SAND) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds’ portfolios at the end of the first quarter of 2020. At the end of this article we will also compare SAND to other stocks including BGC Partners, Inc. (NASDAQ:BGCP), Beam Therapeutics Inc. (NASDAQ:BEAM), and Opko Health Inc. (NYSE:OPK) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are assumed to be unimportant, outdated investment vehicles of the past. While there are more than 8000 funds with their doors open today, We choose to focus on the bigwigs of this group, approximately 850 funds. Most estimates calculate that this group of people preside over bulk of the smart money’s total asset base, and by shadowing their best investments, Insider Monkey has discovered numerous investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Joel Greenblatt of Gotham Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the 15 largest gold producing countries to identify emerging companies that are likely to deliver 1000% gains in the coming years. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a gander at the recent hedge fund action surrounding Sandstorm Gold Ltd. (NYSE:SAND).
What does smart money think about Sandstorm Gold Ltd. (NYSE:SAND)?
Heading into the second quarter of 2020, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in SAND a year ago. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Sandstorm Gold Ltd. (NYSE:SAND), which was worth $17.2 million at the end of the third quarter. On the second spot was Sprott Asset Management which amassed $13.6 million worth of shares. Horizon Asset Management, D E Shaw, and Two Sigma Advisors 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 Sprott Asset Management allocated the biggest weight to Sandstorm Gold Ltd. (NYSE:SAND), around 1.25% of its 13F portfolio. Manatuck Hill Partners is also relatively very bullish on the stock, earmarking 1.1 percent of its 13F equity portfolio to SAND.
Since Sandstorm Gold Ltd. (NYSE:SAND) has witnessed falling interest from hedge fund managers, we can see that there lies a certain “tier” of money managers that elected to cut their positions entirely by the end of the first quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest stake of all the hedgies watched by Insider Monkey, worth close to $8.6 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund said goodbye to about $0.3 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Sandstorm Gold Ltd. (NYSE:SAND) but similarly valued. These stocks are BGC Partners, Inc. (NASDAQ:BGCP), Beam Therapeutics Inc. (NASDAQ:BEAM), Opko Health Inc. (NYSE:OPK), and NanoString Technologies Inc (NASDAQ:NSTG). This group of stocks’ market valuations resemble SAND’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BGCP | 31 | 142549 | 4 |
| BEAM | 11 | 157065 | 11 |
| OPK | 13 | 9526 | -3 |
| NSTG | 18 | 118794 | 3 |
| Average | 18.25 | 106984 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $64 million in SAND’s case. BGC Partners, Inc. (NASDAQ:BGCP) is the most popular stock in this table. On the other hand Beam Therapeutics Inc. (NASDAQ:BEAM) is the least popular one with only 11 bullish hedge fund positions. Sandstorm Gold Ltd. (NYSE:SAND) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on SAND as the stock returned 84.4% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
