Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the fourth quarter. Among them, Amazon and Netflix ranked among the top 30 picks and both lost around 20%. Facebook, which was the second most popular stock, lost 14% amid uncertainty regarding the interest rates and tech valuations. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Pretium Resources Inc (NYSE:PVG) was in 17 hedge funds’ portfolios at the end of September. PVG investors should pay attention to an increase in activity from the world’s largest hedge funds recently. There were 15 hedge funds in our database with PVG positions at the end of the previous quarter. Our calculations also showed that PVG isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are tons of tools stock market investors put to use to evaluate publicly traded companies. A pair of the most innovative tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best money managers can outclass the market by a very impressive margin (see the details here).
Let’s review the fresh hedge fund action encompassing Pretium Resources Inc (NYSE:PVG).
How are hedge funds trading Pretium Resources Inc (NYSE:PVG)?
Heading into the fourth quarter of 2018, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in PVG at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Pretium Resources Inc (NYSE:PVG) was held by Anchor Bolt Capital, which reported holding $41.4 million worth of stock at the end of September. It was followed by Sun Valley Gold with a $28.6 million position. Other investors bullish on the company included Anchor Bolt Capital, Sprott Asset Management, and Bridger Management.
Now, some big names have been driving this bullishness. BlueCrest Capital Mgmt., managed by Michael Platt and William Reeves, assembled the most outsized position in Pretium Resources Inc (NYSE:PVG). BlueCrest Capital Mgmt. had $0.3 million invested in the company at the end of the quarter. George Zweig, Shane Haas and Ravi Chander’s Signition LP also initiated a $0.3 million position during the quarter. The other funds with brand new PVG positions are Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, Israel Englander’s Millennium Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks similar to Pretium Resources Inc (NYSE:PVG). These stocks are Sandy Spring Bancorp Inc. (NASDAQ:SASR), Web.com Group, Inc. (NYSE:WEB), Continental Building Products Inc (NYSE:CBPX), and Interface, Inc. (NASDAQ:TILE). This group of stocks’ market caps resemble PVG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SASR | 12 | 90603 | -1 |
| WEB | 24 | 481203 | 1 |
| CBPX | 18 | 115523 | -2 |
| TILE | 17 | 96988 | -1 |
| Average | 17.75 | 196079 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $196 million. That figure was $97 million in PVG’s case. Web.com Group, Inc. (NYSE:WEB) is the most popular stock in this table. On the other hand Sandy Spring Bancorp Inc. (NASDAQ:SASR) is the least popular one with only 12 bullish hedge fund positions. Pretium Resources Inc (NYSE:PVG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WEB might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
