Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Alamos Gold Inc (NYSE:AGI).
Alamos Gold Inc (NYSE:AGI) was in 19 hedge funds’ portfolios at the end of March. AGI investors should be aware of an increase in support from the world’s most elite money managers recently. There were 16 hedge funds in our database with AGI positions at the end of the previous quarter. Our calculations also showed that AGI 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a look at the recent hedge fund action encompassing Alamos Gold Inc (NYSE:AGI).
How are hedge funds trading Alamos Gold Inc (NYSE:AGI)?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards AGI over the last 18 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Alamos Gold Inc (NYSE:AGI), with a stake worth $66 million reported as of the end of September. Trailing Renaissance Technologies was Sprott Asset Management, which amassed a stake valued at $52.7 million. Sun Valley Gold, Arrowstreet Capital, and Royce & Associates 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 Sprott Asset Management allocated the biggest weight to Alamos Gold Inc (NYSE:AGI), around 4.83% of its 13F portfolio. Sun Valley Gold is also relatively very bullish on the stock, designating 2.51 percent of its 13F equity portfolio to AGI.
As aggregate interest increased, some big names have been driving this bullishness. Lansdowne Partners, managed by Alex Snow, initiated the most valuable position in Alamos Gold Inc (NYSE:AGI). Lansdowne Partners had $5.5 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $0.5 million position during the quarter. The other funds with brand new AGI positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Noam Gottesman’s GLG Partners, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Alamos Gold Inc (NYSE:AGI) but similarly valued. These stocks are Washington Real Estate Investment Trust (NYSE:WRE), Synaptics Incorporated (NASDAQ:SYNA), Coca-Cola Consolidated Inc. (NASDAQ:COKE), and Principia Biopharma Inc. (NASDAQ:PRNB). This group of stocks’ market caps are closest to AGI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WRE | 5 | 90460 | -4 |
| SYNA | 26 | 345715 | 0 |
| COKE | 9 | 14446 | -2 |
| PRNB | 21 | 734674 | 1 |
| Average | 15.25 | 296324 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $296 million. That figure was $234 million in AGI’s case. Synaptics Incorporated (NASDAQ:SYNA) is the most popular stock in this table. On the other hand Washington Real Estate Investment Trust (NYSE:WRE) is the least popular one with only 5 bullish hedge fund positions. Alamos Gold Inc (NYSE:AGI) is not the most popular stock in this group but hedge fund interest is still above 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 but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on AGI as the stock returned 69% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Alamos Gold Inc (NYSE:AGI)
Follow Alamos Gold Inc (NYSE:AGI)
Disclosure: None. This article was originally published at Insider Monkey.
