At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Barrick Gold Corporation (NYSE:GOLD).
Barrick Gold Corporation (NYSE:GOLD) was in 54 hedge funds’ portfolios at the end of March. GOLD shareholders have witnessed an increase in enthusiasm from smart money lately. There were 51 hedge funds in our database with GOLD positions at the end of the previous quarter. Our calculations also showed that GOLD 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Steven Cohen of Point72 Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the fresh hedge fund action regarding Barrick Gold Corporation (NYSE:GOLD).
What does smart money think about Barrick Gold Corporation (NYSE:GOLD)?
At Q1’s end, a total of 54 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GOLD over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Barrick Gold Corporation (NYSE:GOLD) was held by Renaissance Technologies, which reported holding $460.4 million worth of stock at the end of September. It was followed by Slate Path Capital with a $185.9 million position. Other investors bullish on the company included Citadel Investment Group, Adage Capital Management, and Oldfield Partners. In terms of the portfolio weights assigned to each position Tegean Capital Management allocated the biggest weight to Barrick Gold Corporation (NYSE:GOLD), around 16.61% of its 13F portfolio. Slate Path Capital is also relatively very bullish on the stock, earmarking 14.25 percent of its 13F equity portfolio to GOLD.
Now, specific money managers were leading the bulls’ herd. Waratah Capital Advisors, managed by Brad Dunkley and Blair Levinsky, assembled the largest position in Barrick Gold Corporation (NYSE:GOLD). Waratah Capital Advisors had $42.1 million invested in the company at the end of the quarter. Jeff Osher’s No Street Capital also initiated a $19.2 million position during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Steven Tananbaum’s GoldenTree Asset Management, and Ari Zweiman’s 683 Capital Partners.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Barrick Gold Corporation (NYSE:GOLD) but similarly valued. These stocks are Las Vegas Sands Corp. (NYSE:LVS), Prudential Public Limited Company (NYSE:PUK), Bank of Montreal (NYSE:BMO), and Enterprise Products Partners L.P. (NYSE:EPD). This group of stocks’ market valuations are similar to GOLD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LVS | 42 | 1186415 | 5 |
| PUK | 6 | 43832 | 0 |
| BMO | 13 | 150563 | 0 |
| EPD | 26 | 215411 | -2 |
| Average | 21.75 | 399055 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $399 million. That figure was $1756 million in GOLD’s case. Las Vegas Sands Corp. (NYSE:LVS) is the most popular stock in this table. On the other hand Prudential Public Limited Company (NYSE:PUK) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Barrick Gold Corporation (NYSE:GOLD) is more popular among hedge funds. 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 returned 7.9% in 2020 through May 22nd but still managed to beat the market by 15.6 percentage points. Hedge funds were also right about betting on GOLD as the stock returned 43.7% so far in Q2 (through May 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
