Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Primero Mining Corp (NYSE:PPP) based on that data.
Is Primero Mining Corp (NYSE:PPP) undervalued? Investors who are in the know are reducing their bets on the stock. The number of bullish hedge fund bets was cut by 2 recently. At the end of this article we will also compare PPP to other stocks including Modine Manufacturing Co. (NYSE:MOD), Credit Suisse AG- VelocityShares Daily Inverse VIX Short Term Etn (NASDAQ:XIV), and Karyopharm Therapeutics Inc (NASDAQ:KPTI) to get a better sense of its popularity.
Today there are a multitude of formulas stock market investors put to use to appraise stocks. A duo of the less utilized formulas are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can trounce the S&P 500 by a very impressive margin (see the details here).
Keeping this in mind, we’re going to take a gander at the recent action encompassing Primero Mining Corp (NYSE:PPP).
What does the smart money think about Primero Mining Corp (NYSE:PPP)?
At the Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Israel Englander’s Millennium Management has the largest position in Primero Mining Corp (NYSE:PPP), worth close to $3.4 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Sun Valley Gold, managed by Peter Franklin Palmedo, which holds a $3.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions include D. E. Shaw’s D E Shaw, Eric Sprott’s Sprott Asset Management and Jim Simons’ Renaissance Technologies.
Due to the fact that Primero Mining Corp (NYSE:PPP) has faced a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of hedgies that slashed their entire stakes in the third quarter. At the top of the heap, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners dumped the biggest investment of the 700 funds monitored by Insider Monkey, totaling close to $0.2 million in call options., and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund dropped about $0.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Primero Mining Corp (NYSE:PPP) but similarly valued. We will take a look at Modine Manufacturing Co. (NYSE:MOD), Credit Suisse AG- VelocityShares Daily Inverse VIX Short Term Etn (NASDAQ:XIV), Karyopharm Therapeutics Inc (NASDAQ:KPTI), and Davids Tea Inc (NASDAQ:DTEA). All of these stocks’ market caps are closest to PPP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MOD | 14 | 39950 | 1 |
| XIV | 11 | 25345 | 6 |
| KPTI | 11 | 65394 | 1 |
| DTEA | 4 | 2238 | -3 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $12 million in PPP’s case. Modine Manufacturing Co. (NYSE:MOD) is the most popular stock in this table. On the other hand, Davids Tea Inc (NASDAQ:DTEA) is the least popular one with only 4 bullish hedge fund positions. Primero Mining Corp (NYSE:PPP) 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. In this regard MOD might be a better candidate to consider a long position.
