Harmony Gold Mining Co. (ADR) (HMY): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Harmony Gold Mining Co. (ADR) (NYSE:HMY) was in 14 hedge funds’ portfolio at the end of the first quarter of 2013. HMY investors should be aware of an increase in enthusiasm from smart money lately. There were 13 hedge funds in our database with HMY holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are many indicators shareholders can use to track the equity markets. Some of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform the S&P 500 by a solid amount (see just how much).

Just as integral, optimistic insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are plenty of stimuli for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).

Now, let’s take a peek at the latest action surrounding Harmony Gold Mining Co. (ADR) (NYSE:HMY).

How have hedgies been trading Harmony Gold Mining Co. (ADR) (NYSE:HMY)?

In preparation for this quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 8% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.

When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the most valuable position in Harmony Gold Mining Co. (ADR) (NYSE:HMY). First Eagle Investment Management has a $133.5 million position in the stock, comprising 0.4% of its 13F portfolio. On First Eagle Investment Management’s heels is John Overdeck and David Siegel of Two Sigma Advisors, with a $7.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Mike Vranos’s Ellington, David Costen Haley’s HBK Investments and D. E. Shaw’s D E Shaw.

As industrywide interest jumped, specific money managers have been driving this bullishness. HBK Investments, managed by David Costen Haley, initiated the largest position in Harmony Gold Mining Co. (ADR) (NYSE:HMY). HBK Investments had 0.8 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also made a $0.4 million investment in the stock during the quarter.

How have insiders been trading Harmony Gold Mining Co. (ADR) (NYSE:HMY)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time period, Harmony Gold Mining Co. (ADR) (NYSE:HMY) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Harmony Gold Mining Co. (ADR) (NYSE:HMY). These stocks are Allied Nevada Gold Corp. (NYSEAMEX:ANV), AuRico Gold Inc (USA) (NYSE:AUQ), Royal Gold, Inc (USA) (NASDAQ:RGLD), New Gold Inc. (USA) (NYSEAMEX:NGD), and IAMGOLD Corporation (USA) (NYSE:IAG). All of these stocks are in the gold industry and their market caps are similar to HMY’s market cap.

With the returns shown by the aforementioned tactics, everyday investors should always keep an eye on hedge fund and insider trading activity, and Harmony Gold Mining Co. (ADR) (NYSE:HMY) is an important part of this process.

Click here to learn why you should track hedge funds