Jaguar Mining Inc (USA) (JAG): Hedge Funds and Insiders Are Bearish, What Should You Do?

Is Jaguar Mining Inc (USA) (NYSE:JAG) a buy, sell, or hold? Investors who are in the know are becoming less confident. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience

If you’d ask most stock holders, hedge funds are seen as worthless, outdated financial tools of years past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the top tier of this club, around 450 funds. It is widely believed that this group oversees the majority of the hedge fund industry’s total capital, and by keeping an eye on their best picks, we have unearthed a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Just as integral, positive insider trading sentiment is a second way to parse down the world of equities. There are many motivations for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this tactic if piggybackers understand where to look (learn more here).

With all of this in mind, let’s take a look at the latest action encompassing Jaguar Mining Inc (USA) (NYSE:JAG).

What does the smart money think about Jaguar Mining Inc (USA) (NYSE:JAG)?

In preparation for this year, a total of 8 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially.

Of the funds we track, Trey Reik’s Bristol Investment Partners had the largest position in Jaguar Mining Inc (USA) (NYSE:JAG), worth close to $3.3 million, comprising 2.1% of its total 13F portfolio. Coming in second is Peter Franklin Palmedo of Sun Valley Gold, with a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Jim Simons’s Renaissance Technologies.

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Insider trading activity in Jaguar Mining Inc (USA) (NYSE:JAG)

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, Jaguar Mining Inc (USA) (NYSE:JAG) has experienced zero unique insiders buying, 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 Jaguar Mining Inc (USA) (NYSE:JAG). These stocks are Gold Standard Ventures Corp (NYSEAMEX:GSV), Kingold Jewelry Inc., (NASDAQ:KGJI), Claude Resources Inc. (USA) (NYSEAMEX:CGR), Solitario Exploration & Royalty Co (USA) (NYSEAMEX:XPL), and Entree Gold Inc (NYSEAMEX:EGI). This group of stocks are in the gold industry and their market caps are similar to JAG’s market cap.

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With the results exhibited by Insider Monkey’s research, retail investors must always watch hedge fund and insider trading sentiment, and Jaguar Mining Inc (USA) (NYSE:JAG) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds