Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industries and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Western Copper and Gold Corporation (NYSE:WRN).
Western Copper and Gold Corporation (NYSE:WRN) has seen an increase in hedge fund sentiment in recent months. WRN was in 4 hedge funds’ portfolios at the end of the third quarter of 2019. There were 2 hedge funds in our database with WRN holdings at the end of the previous quarter. Our calculations also showed that WRN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to 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 flagship best-performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.
Ken Griffin of Citadel Investment Group
We leave no stone unturned when looking for the next great investment idea. For example, Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind let’s view the latest hedge fund action encompassing Western Copper and Gold Corporation (NYSE:WRN).
How are hedge funds trading Western Copper and Gold Corporation (NYSE:WRN)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WRN over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Eric Sprott’s Sprott Asset Management has the number one position in Western Copper and Gold Corporation (NYSE:WRN), worth close to $0.2 million, accounting for 0.1% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies which holds a $0.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish encompass Ken Griffin’s Citadel Investment Group, Mario Gabelli’s GAMCO Investors. In terms of the portfolio weights assigned to each position, Sprott Asset Management allocated the biggest weight to Western Copper and Gold Corporation (NYSE:WRN), around 0.06% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0001 percent of its 13F equity portfolio to WRN.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Renaissance Technologies established the largest position in Western Copper and Gold Corporation (NYSE:WRN). Renaissance Technologies had $0.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Western Copper and Gold Corporation (NYSE:WRN) but similarly valued. We will take a look at USA Truck, Inc. (NASDAQ:USAK), InterNAP Network Services (NASDAQ:INAP), Newater Technology, Inc. (NASDAQ:NEWA), and Blink Charging Co. (NASDAQ:BLNK). This group of stocks’ market caps resembles WRN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| USAK | 6 | 3579 | -5 |
| INAP | 9 | 18298 | 1 |
| NEWA | 1 | 98 | 0 |
| BLNK | 2 | 87 | 0 |
| Average | 4.5 | 5516 | -1 |
View the table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $0 million in WRN’s case. InterNAP Network Services (NASDAQ:INAP) is the most popular stock in this table. On the other hand, Newater Technology, Inc. (NASDAQ:NEWA) is the least popular one with only 1 bullish hedge fund position. Western Copper and Gold Corporation (NYSE:WRN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on WRN as the stock returned 14.1% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.