Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index ETF (SPY) lost 13.5% in the fourth quarter. Seven out of 11 industry groups in the S&P 500 Index were down more than 20% from their 52-week highs at the trough of the stock market crash. The average return of a randomly picked stock in the index was even worse. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 15 most popular S&P 500 stocks among hedge funds not only recouped their Q4 losses but also outperformed the index by more than 3 percentage points. In this article, we will take a look at what hedge funds think about B2Gold Corp (NYSE:BTG).
B2Gold Corp (NYSE:BTG) investors should pay attention to an increase in support from the world’s most elite money managers in recent months. Our calculations also showed that BTG isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s view the new hedge fund action encompassing B2Gold Corp (NYSE:BTG).
What does the smart money think about B2Gold Corp (NYSE:BTG)?
At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BTG over the last 14 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in B2Gold Corp (NYSE:BTG). Renaissance Technologies has a $37.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Robert Bishop of Impala Asset Management, with a $25.6 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions encompass Paul Marshall and Ian Wace’s Marshall Wace LLP, Eric Sprott’s Sprott Asset Management and Lee Ainslie’s Maverick Capital.
As one would reasonably expect, some big names have jumped into B2Gold Corp (NYSE:BTG) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the biggest position in B2Gold Corp (NYSE:BTG). Marshall Wace LLP had $11.5 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also initiated a $7 million position during the quarter. The following funds were also among the new BTG investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors, and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as B2Gold Corp (NYSE:BTG) but similarly valued. These stocks are Gold Fields Limited (NYSE:GFI), Armstrong World Industries, Inc. (NYSE:AWI), Ligand Pharmaceuticals Inc. (NASDAQ:LGND), and 2U Inc (NASDAQ:TWOU). This group of stocks’ market values are closest to BTG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GFI | 9 | 160670 | -1 |
| AWI | 26 | 519892 | 4 |
| LGND | 24 | 532704 | -4 |
| TWOU | 11 | 106758 | -3 |
| Average | 17.5 | 330006 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $330 million. That figure was $105 million in BTG’s case. Armstrong World Industries, Inc. (NYSE:AWI) is the most popular stock in this table. On the other hand Gold Fields Limited (NYSE:GFI) is the least popular one with only 9 bullish hedge fund positions. B2Gold Corp (NYSE:BTG) 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. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately BTG wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); BTG investors were disappointed as the stock returned -8.2% 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.