The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Kinross Gold Corporation (NYSE:KGC) and determine whether the smart money was really smart about this stock.
Kinross Gold Corporation (NYSE:KGC) has seen an increase in enthusiasm from smart money in recent months. Kinross Gold Corporation (NYSE:KGC) was in 30 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 31. Our calculations also showed that KGC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Crispin Odey of Odey Asset Management Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a look at the fresh hedge fund action surrounding Kinross Gold Corporation (NYSE:KGC).
What have hedge funds been doing with Kinross Gold Corporation (NYSE:KGC)?
Heading into the third quarter of 2020, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in KGC a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Kinross Gold Corporation (NYSE:KGC), with a stake worth $381.6 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $134.6 million. Sprott Asset Management, Two Sigma Advisors, and Odey Asset Management Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Quaker Capital Investments allocated the biggest weight to Kinross Gold Corporation (NYSE:KGC), around 8.85% of its 13F portfolio. Odey Asset Management Group is also relatively very bullish on the stock, designating 5.52 percent of its 13F equity portfolio to KGC.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Capital Growth Management, managed by Ken Heebner, created the biggest position in Kinross Gold Corporation (NYSE:KGC). Capital Growth Management had $22.4 million invested in the company at the end of the quarter. Mark G. Schoeppner’s Quaker Capital Investments also initiated a $19.5 million position during the quarter. The other funds with brand new KGC positions are Louis Bacon’s Moore Global Investments, George McCabe’s Portolan Capital Management, and Richard Driehaus’s Driehaus Capital.
Let’s go over hedge fund activity in other stocks similar to Kinross Gold Corporation (NYSE:KGC). These stocks are PTC Inc (NASDAQ:PTC), Dropbox, Inc. (NASDAQ:DBX), Autohome Inc (NYSE:ATHM), Banco de Chile (NYSE:BCH), Lennox International Inc. (NYSE:LII), Centrais Eletricas Brasileiras SA (NYSE:EBR), and The Western Union Company (NYSE:WU). This group of stocks’ market caps are similar to KGC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PTC | 40 | 1255947 | 5 |
| DBX | 51 | 1326475 | 7 |
| ATHM | 24 | 820669 | 9 |
| BCH | 3 | 38541 | -1 |
| LII | 24 | 258111 | 3 |
| EBR | 8 | 10334 | 3 |
| WU | 34 | 622814 | 0 |
| Average | 26.3 | 618984 | 3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $619 million. That figure was $806 million in KGC’s case. Dropbox, Inc. (NASDAQ:DBX) is the most popular stock in this table. On the other hand Banco de Chile (NYSE:BCH) is the least popular one with only 3 bullish hedge fund positions. Kinross Gold Corporation (NYSE:KGC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KGC is 64.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and still beat the market by 17.6 percentage points. Hedge funds were also right about betting on KGC as the stock returned 28.3% during Q3 (through September 14th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Kinross Gold Corp (NYSE:KGC)
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Disclosure: None. This article was originally published at Insider Monkey.
