The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Harmony Gold Mining Company Limited (NYSE:HMY) based on those filings.
Is Harmony Gold Mining Company Limited (NYSE:HMY) an excellent stock to buy now? Investors who are in the know are selling. The number of long hedge fund bets dropped by 3 lately. Our calculations also showed that HMY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). HMY was in 9 hedge funds’ portfolios at the end of March. There were 12 hedge funds in our database with HMY positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are perceived as unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at present, We hone in on the top tier of this group, approximately 850 funds. It is estimated that this group of investors direct the majority of the smart money’s total asset base, and by tailing their finest picks, Insider Monkey has unearthed various investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated 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 .
Paul Tudor Jones of Tudor Investment Corp
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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 we’re going to review the key hedge fund action surrounding Harmony Gold Mining Company Limited (NYSE:HMY).
What have hedge funds been doing with Harmony Gold Mining Company Limited (NYSE:HMY)?
Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards HMY over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Harmony Gold Mining Company Limited (NYSE:HMY), with a stake worth $30.7 million reported as of the end of September. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $3.1 million. Millennium Management, Two Sigma Advisors, and AQR 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 Renaissance Technologies allocated the biggest weight to Harmony Gold Mining Company Limited (NYSE:HMY), around 0.03% of its 13F portfolio. GLG Partners is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to HMY.
Seeing as Harmony Gold Mining Company Limited (NYSE:HMY) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of funds that slashed their entire stakes by the end of the first quarter. At the top of the heap, Mark Broach’s Manatuck Hill Partners said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, comprising an estimated $0.7 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also sold off its stock, about $0.4 million worth. These moves are important to note, as total hedge fund interest was cut by 3 funds by the end of the first quarter.
Let’s also examine hedge fund activity in other stocks similar to Harmony Gold Mining Company Limited (NYSE:HMY). We will take a look at National Research Corporation (NASDAQ:NRC), Uniti Group Inc. (NASDAQ:UNIT), Osisko Gold Royalties Ltd (NYSE:OR), and Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC). All of these stocks’ market caps match HMY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NRC | 8 | 41203 | -1 |
| UNIT | 13 | 73283 | -2 |
| OR | 13 | 101894 | 0 |
| TRHC | 7 | 18000 | 1 |
| Average | 10.25 | 58595 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $39 million in HMY’s case. Uniti Group Inc. (NASDAQ:UNIT) is the most popular stock in this table. On the other hand Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) is the least popular one with only 7 bullish hedge fund positions. Harmony Gold Mining Company Limited (NYSE:HMY) 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 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on HMY as the stock returned 58.7% 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.
