Is Pan American Silver Corp. (USA) (PAAS) Going to Burn These Hedge Funds?

Pan American Silver Corp. (USA) (NASDAQ:PAAS) was in 13 hedge funds’ portfolio at the end of March. PAAS has seen a decrease in support from the world’s most elite money managers lately. There were 16 hedge funds in our database with PAAS holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are tons of indicators market participants can use to analyze the equity markets. Two of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can beat their index-focused peers by a very impressive amount (see just how much).

Just as beneficial, optimistic insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are lots of reasons for an executive to cut shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).

Now, let’s take a gander at the key action encompassing Pan American Silver Corp. (USA) (NASDAQ:PAAS).

What have hedge funds been doing with Pan American Silver Corp. (USA) (NASDAQ:PAAS)?

In preparation for this quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of -19% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly.

Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in Pan American Silver Corp. (USA) (NASDAQ:PAAS), worth close to $163.8 million, comprising 0.5% of its total 13F portfolio. The second largest stake is held by Dreman Value Management, managed by David Dreman, which held a $22.8 million position; 0.6% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Clint Carlson’s Carlson Capital, Eric Sprott’s Sprott Asset Management and Jim Simons’s Renaissance Technologies.

Due to the fact that Pan American Silver Corp. (USA) (NASDAQ:PAAS) has faced bearish sentiment from the smart money, it’s safe to say that there were a few hedgies that decided to sell off their entire stakes in Q1. At the top of the heap, Israel Englander’s Millennium Management dumped the biggest investment of all the hedgies we track, worth close to $4 million in stock.. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also sold off its stock, about $3.1 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds in Q1.

Insider trading activity in Pan American Silver Corp. (USA) (NASDAQ:PAAS)

Insider purchases made by high-level executives is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, Pan American Silver Corp. (USA) (NASDAQ:PAAS) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Pan American Silver Corp. (USA) (NASDAQ:PAAS). These stocks are Silvercorp Metals Inc. (USA) (NYSE:SVM), Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), Hecla Mining Company (NYSE:HL), First Majestic Silver Corp (NYSE:AG), and Coeur d’Alene Mines Corporation (NYSE:CDE). This group of stocks are in the silver industry and their market caps are closest to PAAS’s market cap.

With the returns exhibited by the aforementioned time-tested strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Pan American Silver Corp. (USA) (NASDAQ:PAAS) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds