The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Almaden Minerals Ltd. (NYSE:AAU) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is AAU a good stock to buy? Almaden Minerals Ltd. (NYSE:AAU) investors should pay attention to a decrease in hedge fund interest of late. Almaden Minerals Ltd. (NYSE:AAU) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 4. There were 4 hedge funds in our database with AAU holdings at the end of December. Our calculations also showed that AAU isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Eric Sprott of Sprott Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the recent hedge fund action encompassing Almaden Minerals Ltd. (NYSE:AAU).
Do Hedge Funds Think AAU Is A Good Stock To Buy Now?
At the end of March, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in AAU a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Sprott Asset Management held the most valuable stake in Almaden Minerals Ltd. (NYSE:AAU), which was worth $0.1 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $0 million worth of shares. Millennium Management was 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 Sprott Asset Management allocated the biggest weight to Almaden Minerals Ltd. (NYSE:AAU), around 0.01% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0 percent of its 13F equity portfolio to AAU.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let’s go over hedge fund activity in other stocks similar to Almaden Minerals Ltd. (NYSE:AAU). These stocks are Nine Energy Service, Inc. (NYSE:NINE), U.S. Gold Corp. (NASDAQ:USAU), Moxian, Inc. (NASDAQ:MOXC), Quest Resource Holding Corp (NASDAQ:QRHC), Qualigen Therapeutics, Inc. (NASDAQ:QLGN), NeuroBo Pharmaceuticals, Inc. (NASDAQ:NRBO), and Purple Biotech Ltd. (NASDAQ:PPBT). All of these stocks’ market caps are similar to AAU’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NINE | 6 | 4986 | -1 |
| USAU | 1 | 209 | 0 |
| MOXC | 2 | 1303 | 0 |
| QRHC | 8 | 12198 | 1 |
| QLGN | 1 | 610 | 0 |
| NRBO | 1 | 109 | -1 |
| PPBT | 4 | 1380 | 2 |
| Average | 3.3 | 2971 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $0 million in AAU’s case. Quest Resource Holding Corp (NASDAQ:QRHC) is the most popular stock in this table. On the other hand U.S. Gold Corp. (NASDAQ:USAU) is the least popular one with only 1 bullish hedge fund positions. Almaden Minerals Ltd. (NYSE:AAU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AAU is 40.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately AAU wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AAU investors were disappointed as the stock returned 1.9% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
