After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Royal Gold, Inc (NASDAQ:RGLD).
Royal Gold, Inc (NASDAQ:RGLD) investors should pay attention to an increase in hedge fund interest lately. Royal Gold, Inc (NASDAQ:RGLD) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 30. Our calculations also showed that RGLD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Ray Dalio of Bridgewater Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a gander at the recent hedge fund action regarding Royal Gold, Inc (NASDAQ:RGLD).
Do Hedge Funds Think RGLD Is A Good Stock To Buy Now?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from one quarter earlier. By comparison, 30 hedge funds held shares or bullish call options in RGLD a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Royal Gold, Inc (NASDAQ:RGLD), which was worth $55.2 million at the end of the third quarter. On the second spot was Kopernik Global Investors which amassed $22.6 million worth of shares. Horizon Asset Management, Millennium Management, and D E Shaw 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 Kopernik Global Investors allocated the biggest weight to Royal Gold, Inc (NASDAQ:RGLD), around 2.54% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, setting aside 0.67 percent of its 13F equity portfolio to RGLD.
Consequently, specific money managers were breaking ground themselves. Sciencast Management, managed by Qing Li, assembled the most valuable position in Royal Gold, Inc (NASDAQ:RGLD). Sciencast Management had $1.3 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also initiated a $0.5 million position during the quarter. The following funds were also among the new RGLD investors: Jinghua Yan’s TwinBeech Capital, Peter Algert’s Algert Global, and Greg Eisner’s Engineers Gate Manager.
Let’s now review hedge fund activity in other stocks similar to Royal Gold, Inc (NASDAQ:RGLD). We will take a look at The Boston Beer Company Inc (NYSE:SAM), Teradata Corporation (NYSE:TDC), Stericycle Inc (NASDAQ:SRCL), TriNet Group Inc (NYSE:TNET), Performance Food Group Company (NYSE:PFGC), Affiliated Managers Group, Inc. (NYSE:AMG), and Duolingo Inc. (NASDAQ:DUOL). This group of stocks’ market valuations match RGLD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAM | 19 | 237876 | -23 |
| TDC | 28 | 583784 | 2 |
| SRCL | 17 | 516772 | -9 |
| TNET | 19 | 462214 | 1 |
| PFGC | 36 | 747258 | -5 |
| AMG | 30 | 753848 | 0 |
| DUOL | 12 | 183935 | 12 |
| Average | 23 | 497955 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $498 million. That figure was $168 million in RGLD’s case. Performance Food Group Company (NYSE:PFGC) is the most popular stock in this table. On the other hand Duolingo Inc. (NASDAQ:DUOL) is the least popular one with only 12 bullish hedge fund positions. Royal Gold, Inc (NASDAQ:RGLD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RGLD is 45.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on RGLD as the stock returned 10.2% since the end of the third quarter (through 12/31) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
