Gold Fields Limited (ADR) (NYSE:GFI) shares are 2% in the red in afternoon trading because gold spot prices have continued to decline as more and more investors expect the Federal Reserve to raise interest rates during the next FOMC meeting next month. If the Fed raises rates, gold will not be as attractive of an asset and the potential for future hyper-inflation will be lower. Nevertheless, gold bulls feel that there could yet be substantial upside in the commodity if global conditions continue to deteriorate, although cryptocurrencies like Bitcoin are also starting to eat into gold’s domain of being a safe haven for investors outside of cash and stocks.
Is Gold Fields Limited (ADR) (NYSE:GFI) a cheap investment right now? Prominent investors are taking an optimistic view. Heading into the second quarter of 2016, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 31% rise from one quarter earlier. At the end of this article we will also compare GFI to other stocks including Texas Roadhouse Inc (NASDAQ:TXRH), Dillard’s, Inc. (NYSE:DDS), and Nabors Industries Ltd. (NYSE:NBR) to get a better sense of its popularity.
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Of the funds tracked by Insider Monkey, Orbis Investment Management, managed by William B. Gray, holds the biggest position in Gold Fields Limited (ADR) (NYSE:GFI). Orbis Investment Management has a $245.9 million position in the stock, comprising 1.6% of its 13F portfolio. On Orbis Investment Management’s heels is Renaissance Technologies, managed by Jim Simons, which holds a $48.3 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Robert Polak’s Anchor Bolt Capital, and Cliff Asness’ AQR Capital Management.
On the next page we’ll look at some funds that took up positions in Gold Fields during Q1, as well as compare the stock to a handful of others with similar market caps.
As aggregate interest increased in Q1, key money managers were leading the bulls’ herd. Orbis Investment Management initiated the largest position in Gold Fields Limited (ADR) (NYSE:GFI), having $245.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $3.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Solomon Kumin’s Folger Hill Asset Management, and Mark Broach’s Manatuck Hill Partners.
Let’s now take a look at hedge fund activity in other stocks similar to Gold Fields Limited (ADR) (NYSE:GFI). These stocks are Texas Roadhouse Inc (NASDAQ:TXRH), Dillard’s, Inc. (NYSE:DDS), Nabors Industries Ltd. (NYSE:NBR), and Choice Hotels International, Inc. (NYSE:CHH). All of these stocks’ market caps match GFI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TXRH | 11 | 92390 | -4 |
| DDS | 19 | 296049 | 2 |
| NBR | 30 | 335090 | 8 |
| CHH | 10 | 43249 | 0 |
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $192 million. That figure was $418 million in GFI’s case. Nabors Industries Ltd. (NYSE:NBR) is the most popular stock in this table. On the other hand Choice Hotels International, Inc. (NYSE:CHH) is the least popular one with only 10 bullish hedge fund positions. Gold Fields Limited (ADR) (NYSE:GFI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NBR might be a better candidate to consider a long position.
Disclosure: None
