Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS) investors should be aware of a decrease in activity from the world’s largest hedge funds of late.
If you’d ask most traders, hedge funds are perceived as underperforming, outdated financial tools of the past. While there are more than 8000 funds with their doors open at the moment, we look at the leaders of this club, around 450 funds. It is widely believed that this group oversees most of the smart money’s total capital, and by paying attention to their top stock picks, we have uncovered a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as important, bullish insider trading activity is a second way to break down the financial markets. Obviously, there are many reasons for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the valuable potential of this strategy if shareholders understand where to look (learn more here).
With all of this in mind, it’s important to take a look at the recent action surrounding Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS).
Hedge fund activity in Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS)
Heading into 2013, a total of 8 of the hedge funds we track held long positions in this stock, a change of -33% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the largest position in Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS). Royce & Associates has a $1.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedgies that are bullish include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
Seeing as Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their entire stakes at the end of the year. Interestingly, Peter Franklin Palmedo’s Sun Valley Gold dropped the largest stake of the 450+ funds we watch, totaling an estimated $3.6 million in stock.. Andy Redleaf’s fund, Whitebox Advisors, also dumped its stock, about $0.8 million worth. These transactions are important to note, as total hedge fund interest fell by 4 funds at the end of the year.
What do corporate executives and insiders think about Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS)?
Insider purchases made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time frame, Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS) has seen zero unique insiders buying, 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 Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS). These stocks are DRDGOLD Ltd. (ADR) (NYSE:DRD), Banro Corporation (USA) (NYSEAMEX:BAA), Tanzanian Royalty Exploration Corp. (US) (NYSEAMEX:TRX), Primero Mining Corp (NYSE:PPP), and Timmins Gold Corp (NYSEAMEX:TGD). This group of stocks are in the gold industry and their market caps resemble GSS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| DRDGOLD Ltd. (ADR) (NYSE:DRD) | 1 | 0 | 0 |
| Banro Corporation (USA) (NYSEAMEX:BAA) | 2 | 0 | 0 |
| Tanzanian Royalty Exploration Corp. (US) (NYSEAMEX:TRX) | 5 | 0 | 0 |
| Primero Mining Corp (NYSE:PPP) | 7 | 0 | 0 |
| Timmins Gold Corp (NYSEAMEX:TGD) | 6 | 0 | 0 |
With the returns exhibited by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Golden Star Resources Ltd. (USA) (NYSEAMEX:GSS) is no exception.
