The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Kirkland Lake Gold Ltd. (NYSE:KL) based on those filings.
Kirkland Lake Gold Ltd. (NYSE:KL) investors should pay attention to an increase in support from the world’s most elite money managers lately. KL was in 28 hedge funds’ portfolios at the end of the first quarter of 2020. There were 24 hedge funds in our database with KL holdings at the end of the previous quarter. Our calculations also showed that KL 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 eyes of most traders, hedge funds are perceived as unimportant, old investment vehicles of years past. While there are more than 8000 funds in operation today, Our experts hone in on the top tier of this club, approximately 850 funds. Most estimates calculate that this group of people orchestrate the majority of the smart money’s total capital, and by monitoring their finest investments, Insider Monkey has uncovered a few investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Ken Griffin of Citadel Investment Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one as well as this tiny lithium play. 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. Now let’s check out the new hedge fund action regarding Kirkland Lake Gold Ltd. (NYSE:KL).
What does smart money think about Kirkland Lake Gold Ltd. (NYSE:KL)?
At the end of the first quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in KL over the last 18 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Kirkland Lake Gold Ltd. (NYSE:KL), which was worth $136.2 million at the end of the third quarter. On the second spot was Sprott Asset Management which amassed $72.7 million worth of shares. Arrowstreet Capital, Citadel Investment Group, and Paulson & Co 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 Greywolf Capital Management allocated the biggest weight to Kirkland Lake Gold Ltd. (NYSE:KL), around 24.14% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, earmarking 6.66 percent of its 13F equity portfolio to KL.
As one would reasonably expect, specific money managers have jumped into Kirkland Lake Gold Ltd. (NYSE:KL) headfirst. Paulson & Co, managed by John Paulson, initiated the most outsized position in Kirkland Lake Gold Ltd. (NYSE:KL). Paulson & Co had $44.2 million invested in the company at the end of the quarter. Peter Franklin Palmedo’s Sun Valley Gold also made a $20.5 million investment in the stock during the quarter. The other funds with brand new KL positions are Israel Englander’s Millennium Management, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, and Joe Milano’s Greenhouse Funds.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Kirkland Lake Gold Ltd. (NYSE:KL) but similarly valued. We will take a look at Huntington Bancshares Incorporated (NASDAQ:HBAN), PerkinElmer, Inc. (NYSE:PKI), Autohome Inc (NYSE:ATHM), and Carvana Co. (NYSE:CVNA). This group of stocks’ market valuations resemble KL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HBAN | 29 | 85788 | 4 |
| PKI | 21 | 647867 | 1 |
| ATHM | 15 | 708219 | 2 |
| CVNA | 52 | 1819908 | -1 |
| Average | 29.25 | 815446 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $815 million. That figure was $552 million in KL’s case. Carvana Co. (NYSE:CVNA) is the most popular stock in this table. On the other hand Autohome Inc (NYSE:ATHM) is the least popular one with only 15 bullish hedge fund positions. Kirkland Lake Gold Ltd. (NYSE:KL) is not the least popular stock in this group but hedge fund interest is still below 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on KL as the stock returned 29.9% during the second quarter and outperformed the market by an even larger margin.
Follow Kirkland Lake Gold Ltd. (NYSE:KL)
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Disclosure: None. This article was originally published at Insider Monkey.
