Is Royal Gold, Inc USA) (RGLD) Going to Burn These Hedge Funds and Insiders?

Is Royal Gold, Inc USA) (NASDAQ:RGLD) a buy?

In the 21st century investor’s toolkit, there are tons of indicators investors can use to watch stocks. Two of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outperform the market by a superb margin (see just how much).

Just as useful, optimistic insider trading sentiment is another way to look at the world of equities. Obviously, there are many motivations for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if investors know what to do (learn more here).

What’s more, it’s important to discuss the recent info surrounding Royal Gold, Inc USA) (NASDAQ:RGLD).

How are hedge funds trading Royal Gold, Inc USA) (NASDAQ:RGLD)?

At Q2’s end, a total of 21 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes substantially.

When using filings from the hedgies we track, Matt McLennan’s First Eagle Investment Management had the biggest position in Royal Gold, Inc USA) (NASDAQ:RGLD), worth close to $36.5 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $14.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Jim Simons’s Renaissance Technologies, Glenn Russell Dubin’s Highbridge Capital Management and Ken Griffin’s Citadel Investment Group.

Due to the fact Royal Gold, Inc USA) (NASDAQ:RGLD) has experienced dropping sentiment from the smart money’s best and brightest, logic holds that there were a few hedgies that decided to sell off their full holdings heading into Q2. Interestingly, Bart Baum’s Ionic Capital Management dumped the biggest stake of the 450+ funds we monitor, totaling an estimated $11.3 million in stock, and John Burbank of Passport Capital was right behind this move, as the fund said goodbye to about $7.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Royal Gold, Inc USA) (NASDAQ:RGLD)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time frame, Royal Gold, Inc USA) (NASDAQ:RGLD) has seen 2 unique insiders buying, and 2 insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Royal Gold, Inc USA) (NASDAQ:RGLD). These stocks are Agnico-Eagle Mines Limited (USA) (NYSE:AEM), Eldorado Gold Corp (USA) (NYSE:EGO), Franco-Nevada Corporation (NYSE:FNV), Gold Fields Limited (ADR) (NYSE:GFI), and New Gold Inc. (USA) (NYSEAMEX:NGD). This group of stocks are the members of the gold industry and their market caps are similar to RGLD’s market cap.

Using the results demonstrated by the previously mentioned studies, average investors must always track hedge fund and insider trading sentiment, and Royal Gold, Inc USA) (NASDAQ:RGLD) shareholders fit into this picture quite nicely.

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