Hedge Funds Aren’t Crazy About Mag Silver Corp (USA) (MVG) Anymore

Is Mag Silver Corp (USA) (NYSEAMEX:MVG) the right pick for your portfolio? Prominent investors are in a bearish mood. The number of bullish hedge fund positions were trimmed by 2 recently.

In the financial world, there are a multitude of methods market participants can use to track the equity markets. A duo of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce the S&P 500 by a superb margin (see just how much).

Just as integral, positive insider trading sentiment is a second way to break down the financial markets. Obviously, there are many stimuli for an executive to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).

Now, let’s take a peek at the recent action regarding Mag Silver Corp (USA) (NYSEAMEX:MVG).

What does the smart money think about Mag Silver Corp (USA) (NYSEAMEX:MVG)?

In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of -20% from the third quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings significantly.

Of the funds we track, Peter Franklin Palmedo’s Sun Valley Gold had the largest position in Mag Silver Corp (USA) (NYSEAMEX:MVG), worth close to $10.1 million, comprising 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $1.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners, Michael Katz’s Glenrock Global Partners and Chuck Royce’s Royce & Associates.

Because Mag Silver Corp (USA) (NYSEAMEX:MVG) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few money managers that slashed their positions entirely last quarter. At the top of the heap, Eric Sprott’s Sprott Asset Management said goodbye to the largest position of the “upper crust” of funds we key on, valued at close to $33 million in stock., and Bart Baum of Ionic Capital Management was right behind this move, as the fund sold off about $1.5 million worth. These transactions are interesting, as total hedge fund interest was cut by 2 funds last quarter.

How have insiders been trading Mag Silver Corp (USA) (NYSEAMEX:MVG)?

Bullish insider trading is particularly usable when the company in question has seen transactions within the past six months. Over the last 180-day time period, Mag Silver Corp (USA) (NYSEAMEX:MVG) 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 Mag Silver Corp (USA) (NYSEAMEX:MVG). These stocks are First Majestic Silver Corp (NYSE:AG), Hecla Mining Company (NYSE:HL), Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), Silvercorp Metals Inc. (USA) (NYSE:SVM), and Endeavour Silver Corp. (CAN) (NYSE:EXK). This group of stocks are in the silver industry and their market caps match MVG’s market cap.

With the results demonstrated by the aforementioned research, everyday investors should always monitor hedge fund and insider trading sentiment, and Mag Silver Corp (USA) (NYSEAMEX:MVG) applies perfectly to this mantra.

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