Hedge Funds Never Been Less Bullish On Gold Resource Corporation (GORO)

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 September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Gold Resource Corporation (NYSE:GORO) based on those filings.

Gold Resource Corporation (NYSE:GORO) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 10. GORO has seen a decrease in hedge fund interest lately. There were 7 hedge funds in our database with GORO positions at the end of the second quarter. Our calculations also showed that GORO isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.

If you’d ask most investors, hedge funds are perceived as worthless, old investment tools of the past. While there are more than 8000 funds in operation at the moment, Our experts look at the aristocrats of this group, about 850 funds. Most estimates calculate that this group of people command the majority of all hedge funds’ total asset base, and by monitoring their inimitable picks, Insider Monkey has revealed several investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun 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 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Michael Gelband of ExodusPoint Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to go over the key hedge fund action encompassing Gold Resource Corporation (NYSE:GORO).

How have hedgies been trading Gold Resource Corporation (NYSE:GORO)?

At third quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -43% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in GORO over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, David Harding’s Winton Capital Management has the largest position in Gold Resource Corporation (NYSE:GORO), worth close to $0.7 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $0.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish contain Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Gold Resource Corporation (NYSE:GORO), around 0.02% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, setting aside 0.0009 percent of its 13F equity portfolio to GORO.

Since Gold Resource Corporation (NYSE:GORO) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers that elected to cut their entire stakes by the end of the third quarter. Intriguingly, Michael Gelband’s ExodusPoint Capital cut the largest investment of all the hedgies watched by Insider Monkey, comprising about $0.4 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also cut its stock, about $0.2 million worth. These transactions are interesting, as total hedge fund interest fell by 3 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Gold Resource Corporation (NYSE:GORO) but similarly valued. We will take a look at American Renal Associates Holdings, Inc (NYSE:ARA), TELA Bio, Inc. (NASDAQ:TELA), Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR), Value Line, Inc. (NASDAQ:VALU), Astronics Corporation (NASDAQ:ATRO), NVE Corporation (NASDAQ:NVEC), and A-Mark Precious Metals, Inc. (NASDAQ:AMRK). This group of stocks’ market caps resemble GORO’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $2 million in GORO’s case. Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR) is the most popular stock in this table. On the other hand Value Line, Inc. (NASDAQ:VALU) is the least popular one with only 2 bullish hedge fund positions. Gold Resource Corporation (NYSE:GORO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GORO is 18.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and surpassed the market again by 16.1 percentage points. Unfortunately GORO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GORO investors were disappointed as the stock returned -10.7% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

Disclosure: None. This article was originally published at Insider Monkey.