Legendary investors such as Jeffrey Talpins and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Kinross Gold Corporation (NYSE:KGC) from the perspective of those elite funds.
Kinross Gold Corporation (NYSE:KGC) shareholders have witnessed a decrease in enthusiasm from smart money of late. Our calculations also showed that KGC isn’t among the 30 most popular stocks among hedge funds.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to go over the latest hedge fund action encompassing Kinross Gold Corporation (NYSE:KGC).
How are hedge funds trading Kinross Gold Corporation (NYSE:KGC)?
At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in KGC over the last 14 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’s Renaissance Technologies has the biggest position in Kinross Gold Corporation (NYSE:KGC), worth close to $180.4 million, comprising 0.2% of its total 13F portfolio. On Renaissance Technologies’s heels is Cliff Asness of AQR Capital Management, with a $56.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish consist of Crispin Odey’s Odey Asset Management Group, David Iben’s Kopernik Global Investors and John Overdeck and David Siegel’s Two Sigma Advisors.
Since Kinross Gold Corporation (NYSE:KGC) has witnessed a decline in interest from hedge fund managers, logic holds that there was a specific group of money managers that slashed their entire stakes in the third quarter. It’s worth mentioning that Michael Platt and William Reeves’s BlueCrest Capital Mgmt. dumped the biggest investment of the 700 funds watched by Insider Monkey, valued at an estimated $0.1 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also said goodbye to its stock, about $0.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 1 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Kinross Gold Corporation (NYSE:KGC) but similarly valued. We will take a look at Murphy Oil Corporation (NYSE:MUR), New Jersey Resources Corp (NYSE:NJR), Assured Guaranty Ltd. (NYSE:AGO), and Williams-Sonoma, Inc. (NYSE:WSM). This group of stocks’ market values are similar to KGC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MUR | 18 | 181712 | -5 |
| NJR | 18 | 92769 | 6 |
| AGO | 33 | 571123 | 0 |
| WSM | 17 | 284244 | -6 |
| Average | 21.5 | 282462 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $282 million. That figure was $301 million in KGC’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand Williams-Sonoma, Inc. (NYSE:WSM) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Kinross Gold Corporation (NYSE:KGC) is even less popular than WSM. Hedge funds dodged a bullet by taking a bearish stance towards KGC. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately KGC wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); KGC investors were disappointed as the stock returned -2.2% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
