Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Newmont Mining Corp (NYSE:NEM)? The smart money sentiment can provide an answer to this question.
Newmont Mining Corp (NYSE:NEM) was in 37 hedge funds’ portfolios at the end of September. NEM investors should be aware of a decrease in support from the world’s most elite money managers lately. There were 38 hedge funds in our database with NEM 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 Vantiv Inc (NYSE:VNTV), Computer Sciences Corporation (NYSE:CSC), and Icahn Enterprises LP (NASDAQ:IEP) to gather more data points.
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Keeping this in mind, let’s view the fresh action encompassing Newmont Mining Corp (NYSE:NEM).
What have hedge funds been doing with Newmont Mining Corp (NYSE:NEM)?
At the end of the third quarter, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, William B. Gray’s Orbis Investment Management has the biggest position in Newmont Mining Corp (NYSE:NEM), worth close to $125.4 million, corresponding to 1.1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding an $57.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish comprise Glenn Russell Dubin’s Highbridge Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
Due to the fact that Newmont Mining Corp (NYSE:NEM) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of fund managers that slashed their entire stakes in the third quarter. At the top of the heap, Stanley Druckenmiller’s Duquesne Capital dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $29.9 million in stock. Shane Finemore’s fund, Manikay Partners, also sold off its stock, about $11.7 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to Newmont Mining Corp (NYSE:NEM). These stocks are Vantiv Inc (NYSE:VNTV), Computer Sciences Corporation (NYSE:CSC), Icahn Enterprises LP (NASDAQ:IEP), and Credicorp Ltd. (USA) (NYSE:BAP). This group of stocks’ market caps are closest to NEM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNTV | 27 | 474222 | -4 |
| CSC | 34 | 1234724 | 6 |
| IEP | 6 | 7933759 | 0 |
| BAP | 18 | 389335 | -4 |
As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $2508 million. That figure was $536 million in NEM’s case. Computer Sciences Corporation (NYSE:CSC) is the most popular stock in this table. On the other hand Icahn Enterprises LP (NASDAQ:IEP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Newmont Mining Corp (NYSE:NEM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
