We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Coeur d’Alene Mines Corporation (NYSE:CDE).
Hedge fund interest in Coeur d’Alene Mines Corporation (NYSE:CDE) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Harmony Gold Mining Co. (NYSE:HMY), United States Steel Corporation (NYSE:X), and Capitol Federal Financial, Inc. (NASDAQ:CFFN) to gather more data points. Our calculations also showed that CDE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the financial world there are numerous methods market participants have at their disposal to evaluate publicly traded companies. A duo of the most useful methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the elite money managers can trounce the S&P 500 by a superb margin (see the details here).
Joel Greenblatt of Gotham Asset Management
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the key hedge fund action surrounding Coeur d’Alene Mines Corporation (NYSE:CDE).
Hedge fund activity in Coeur d’Alene Mines Corporation (NYSE:CDE)
At the end of the fourth quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CDE over the last 18 quarters. 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 Coeur d’Alene Mines Corporation (NYSE:CDE) was held by Renaissance Technologies, which reported holding $42.7 million worth of stock at the end of September. It was followed by Sprott Asset Management with a $11.3 million position. Other investors bullish on the company included Millennium Management, Citadel Investment Group, and Winton Capital Management. In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to Coeur d’Alene Mines Corporation (NYSE:CDE), around 2.34% of its 13F portfolio. Sloane Robinson Investment Management is also relatively very bullish on the stock, earmarking 1.09 percent of its 13F equity portfolio to CDE.
Due to the fact that Coeur d’Alene Mines Corporation (NYSE:CDE) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedgies that elected to cut their positions entirely heading into Q4. Intriguingly, Jonathan Soros’s JS Capital cut the biggest position of the “upper crust” of funds watched by Insider Monkey, totaling about $0.4 million in stock, and Mike Vranos’s Ellington was right behind this move, as the fund said goodbye to about $0.2 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Coeur d’Alene Mines Corporation (NYSE:CDE) but similarly valued. These stocks are Harmony Gold Mining Co. (NYSE:HMY), United States Steel Corporation (NYSE:X), Capitol Federal Financial, Inc. (NASDAQ:CFFN), and Pacific Premier Bancorp, Inc. (NASDAQ:PPBI). This group of stocks’ market caps match CDE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HMY | 12 | 79446 | 2 |
| X | 26 | 179182 | 6 |
| CFFN | 16 | 142701 | 2 |
| PPBI | 12 | 47542 | 4 |
| Average | 16.5 | 112218 | 3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $112 million. That figure was $74 million in CDE’s case. United States Steel Corporation (NYSE:X) is the most popular stock in this table. On the other hand Harmony Gold Mining Co. (NYSE:HMY) is the least popular one with only 12 bullish hedge fund positions. Coeur d’Alene Mines Corporation (NYSE:CDE) 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th but beat the market by 4.2 percentage points. Unfortunately CDE wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CDE investors were disappointed as the stock returned -56.9% during the same time period 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.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
