Before we spend days researching a stock idea we like to take a look at how hedge funds and billionaire investors recently traded that stock. Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 10 percentage points since the end of the third quarter of 2018. This means hedge funds that are allocating a higher percentage of their portfolio to small-cap stocks were probably underperforming the market. However, this also means that as small-cap stocks start to mean revert, these hedge funds will start delivering better returns than the S&P 500 Index funds. In this article, we will take a look at what hedge funds think about Seabridge Gold, Inc. (NYSE:SA).
Seabridge Gold, Inc. (NYSE:SA) shareholders have witnessed an increase in support from the world’s most elite money managers recently. SA was in 9 hedge funds’ portfolios at the end of June. There were 8 hedge funds in our database with SA positions at the end of the previous quarter. Our calculations also showed that SA isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are seen as unimportant, outdated investment vehicles of the past. While there are over 8000 funds in operation at the moment, Our experts choose to focus on the leaders of this group, around 750 funds. These investment experts command bulk of all hedge funds’ total capital, and by paying attention to their finest stock picks, Insider Monkey has unearthed numerous investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a peek at the fresh hedge fund action surrounding Seabridge Gold, Inc. (NYSE:SA).
What have hedge funds been doing with Seabridge Gold, Inc. (NYSE:SA)?
At the end of the second quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SA over the last 16 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Weiss Asset Management, managed by Andrew Weiss, holds the most valuable position in Seabridge Gold, Inc. (NYSE:SA). Weiss Asset Management has a $13.1 million position in the stock, comprising 0.8% of its 13F portfolio. Coming in second is John Paulson of Paulson & Co, with a $9.5 million position; 0.2% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism comprise Eric Sprott’s Sprott Asset Management, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, key money managers were leading the bulls’ herd. D E Shaw, managed by D. E. Shaw, established the most valuable position in Seabridge Gold, Inc. (NYSE:SA). D E Shaw had $0.3 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $0.2 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Seabridge Gold, Inc. (NYSE:SA). We will take a look at Sapiens International Corporation N.V. (NASDAQ:SPNS), HealthStream, Inc. (NASDAQ:HSTM), MBIA Inc. (NYSE:MBI), and Thermon Group Holdings, Inc. (NYSE:THR). All of these stocks’ market caps match SA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPNS | 8 | 22769 | 1 |
| HSTM | 13 | 45722 | -1 |
| MBI | 18 | 203227 | -1 |
| THR | 10 | 46417 | 2 |
| Average | 12.25 | 79534 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $38 million in SA’s case. MBIA Inc. (NYSE:MBI) is the most popular stock in this table. On the other hand Sapiens International Corporation N.V. (NASDAQ:SPNS) is the least popular one with only 8 bullish hedge fund positions. Seabridge Gold, Inc. (NYSE:SA) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SA investors were disappointed as the stock returned -6.4% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
