Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Gold Resource Corporation (NYSE:GORO).
Gold Resource Corporation (NYSE:GORO) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. GORO was in 9 hedge funds’ portfolios at the end of March. There were 7 hedge funds in our database with GORO holdings at the end of the previous quarter. Our calculations also showed that GORO isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are numerous tools stock market investors employ to analyze publicly traded companies. A couple of the most under-the-radar tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top money managers can outperform the market by a solid margin (see the details here).
We’re going to take a glance at the fresh hedge fund action surrounding Gold Resource Corporation (NYSE:GORO).
How are hedge funds trading Gold Resource Corporation (NYSE:GORO)?
Heading into the second quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GORO over the last 15 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Gold Resource Corporation (NYSE:GORO), with a stake worth $8.6 million reported as of the end of March. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $1.5 million. Marshall Wace LLP, Winton Capital Management, and Sprott Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, some big names have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most outsized position in Gold Resource Corporation (NYSE:GORO). Marshall Wace LLP had $1.3 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks similar to Gold Resource Corporation (NYSE:GORO). These stocks are Cytosorbents Corp (NASDAQ:CTSO), Kodiak Sciences Inc (NASDAQ:KOD), Commercial Vehicle Group, Inc. (NASDAQ:CVGI), and J. Jill, Inc. (NYSE:JILL). This group of stocks’ market values match GORO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTSO | 7 | 7323 | -2 |
| KOD | 5 | 86678 | 0 |
| CVGI | 14 | 44236 | 3 |
| JILL | 11 | 18712 | 1 |
| Average | 9.25 | 39237 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $14 million in GORO’s case. Commercial Vehicle Group, Inc. (NASDAQ:CVGI) is the most popular stock in this table. On the other hand Kodiak Sciences Inc (NASDAQ:KOD) is the least popular one with only 5 bullish hedge fund positions. Gold Resource Corporation (NYSE:GORO) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GORO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GORO investors were disappointed as the stock returned -21.5% 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.