At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Compania de Minas Buenaventura SAA (ADR) (NYSE:BVN) investors should pay attention to a decrease in hedge fund sentiment lately. BVN was in 8 hedge funds’ portfolios at the end of the third quarter of 2016. There were 10 hedge funds in our database with BVN holdings at the end of the previous quarter. 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 Shopify Inc (NYSE:SHOP), AU Optronics Corp. (ADR) (NYSE:AUO), and First Citizens BancShares Inc. (NASDAQ:FCNCA) to gather more data points.
Follow Compania De Minas Bv Sa (NYSE:BVN)
Follow Compania De Minas Bv Sa (NYSE:BVN)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Keeping this in mind, let’s take a peek at the new action surrounding Compania de Minas Buenaventura SAA (ADR) (NYSE:BVN).
What does the smart money think about Compania de Minas Buenaventura SAA (ADR) (NYSE:BVN)?
Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BVN over the last 5 quarters. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Eric Sprott’s Sprott Asset Management has the most valuable position in Compania de Minas Buenaventura SAA (ADR) (NYSE:BVN), worth close to $19.7 million, comprising 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Prince Street Capital Management, led by David Halpert, which holds a $14.4 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism contain Renaissance Technologies, one of the largest hedge funds in the world, Jane Mendillo’s Harvard Management Co and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that Sprott Asset Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Due to the fact that Compania de Minas Buenaventura SAA (ADR) (NYSE:BVN) has encountered bearish sentiment from the smart money, it’s easy to see that there is a sect of fund managers that decided to sell off their entire stakes in the third quarter. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management dumped the largest position of all the investors tracked by Insider Monkey, totaling an estimated $0.3 million in call options. Ken Griffin’s fund, Citadel Investment Group, also dumped its call options, about $0.3 million worth.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Compania de Minas Buenaventura SAA (ADR) (NYSE:BVN) but similarly valued. These stocks are Shopify Inc (NYSE:SHOP), AU Optronics Corp. (ADR) (NYSE:AUO), First Citizens BancShares Inc. (NASDAQ:FCNCA), and Telecom Argentina S.A. (ADR) (NYSE:TEO). This group of stocks’ market values are similar to BVN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SHOP | 31 | 450154 | 7 |
| AUO | 10 | 56987 | -5 |
| FCNCA | 11 | 141274 | 0 |
| TEO | 10 | 85073 | -1 |
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $45 million in BVN’s case. Shopify Inc (NYSE:SHOP) is the most popular stock in this table. On the other hand AU Optronics Corp. (ADR) (NYSE:AUO) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Compania de Minas Buenaventura SAA (ADR) (NYSE:BVN) is even less popular than AUO. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
