David Iben‘s Kopernik Global Investors recently filed its 13F for the reporting period of June 30. Kopernik Global Investors is a Tampa, Florida-based equity management firm founded by Iben in July 2013. Prior to founding Kopernik, Iben served as a director and head of the Global Value team at Vinik Asset Management. Before joining Vinik Asset Management in July 2012, Iben co-founded and served as the lead portfolio manager and CIO of the firm Tradewinds Global Investors, LLC, which boasted assets under management of $38 billion until the time Iben left. According to Kopernik’s latest 13F filing, its U.S. public equity portfolio at the end of June was worth $504.20 million, with 48% of it invested in stocks from the materials sector. Kopernik runs a highly concentrated portfolio by average hedge fund standards, with positions in only 24 stocks and its top ten holdings accounting for 81.11% of its equity portfolio. Mr. Iben is famous on the Street for investing primarily in the natural resources space, so it isn’t really a surprise that Kopernik’s top three holdings at the end of second quarter were all mining stocks: Cameco Corporation (USA)(NYSE:CCJ), Barrick Gold Corporation (USA)(NYSE:ABX), and Kinross Gold Corporation (USA)(NYSE:KGC). Since Kopernik increased its stake substantially in all three of these stocks, we are going to look at them closely and try to understand what makes Mr. Iben so bullish on these companies.
We don’t just track the latest moves of hedge funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research which showed that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests, and easily beating the most popular large-cap picks of funds, which nonetheless get the majority of their collective capital. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic only the very best ideas of the best fund managers on your own? Since the beginning of forward testing in August 2012, the Insider Monkey small-cap strategy has outperformed the market every year, returning 123%, 65 percentage points more than the returns of S&P 500 during the same period (see more details).
Follow David Iben's Kopernik Global Investors
After increasing its stake by 58% during the first quarter, Kopernik Global Investors again increased its stake in its top pick Cameco Corporation (USA)(NYSE:CCJ), by 24% during the second quarter. As of June 30, Kopernik owned over 6.09 million shares of the company, valued at almost $87 million. Cameco Corporation (USA)(NYSE:CCJ) is a Canada-based miner and refiner of uranium, which it supplies to nuclear power plants in Canada and other nations. The move by the Japanese government on August 11 to reopen its first nuclear power plant since the Fukushima disaster in March 2011 is seen by analysts and industry experts as a hugely favorable development for Cameco Corporation (USA)(NYSE:CCJ). The same feeling was conveyed by the company’s CEO, Timothy S. Gitzel, recently. On July 30, the company reported its second quarter results, which came in well below analysts’ estimates. While analysts were expecting EPS of $0.21 on revenue of $581.04 million, the company reported EPS of $0.12 on revenue of $565 million. Apart from Kopernik, another large shareholder of Cameco Corporation (USA)(NYSE:CCJ) which increased its holding in the company during the second quarter was Thomas E. Claugus‘ GMT Capital. The fund increased its stake by 50% during the quarter to over 1.6 million shares.
Proceeding to Kopernik Global Investors’ second-largest holding, Barrick Gold Corporation (USA)(NYSE:ABX). The fund made an additional purchase of 936,032 shares of the company during the second quarter to bring its total holding to around 6.18 million shares worth $65.86 million as of June 30. Shares of the gold mining company have lost almost 20% in the past month alone on the back of the recent slump seen in the price of gold. This slump also weighed on Barrick Gold Corporation (USA)(NYSE:ABX)’s second quarter results, which the company reported on August 5. Revenue for the quarter fell to $2.23 billion from the $2.46 billion the company reported for the same quarter last year. On July 30, the company announced that it has sold off its 50% stake in the Zaldivar mine in Chile to Antofagasta PLC for US$1 billion. This sale, coupled with Barrick Gold Corporation (USA)(NYSE:ABX) selling $1.85 billion worth of assets since the end of March, has been cheered by analysts, who see this as a big move towards accomplishing the goal of reducing the company’s debt by $3 billion, laid out by Barrick Gold Corporation (USA)(NYSE:ABX)’s CEO earlier this year. However, we at Insider Monkey are still cautious on the stock. The largest shareholder of Barrick Gold Corporation (USA)(NYSE:ABX) at the end of the first quarter among the hedge funds we track, Jean-Marie Eveillard‘s First Eagle Investment Management, further increased its stake in the company by 38% during the second quarter.
The purchase of almost 11 million additional shares resulted in Kinross Gold Corporation (USA)(NYSE:KGC) becoming Kopernik Global Investors’ third-largest holding at the end of the second quarter from the fifth-largest at the end of the first quarter. As of June 30, the fund owned almost 27.5 million shares of Kinross Gold Corporation (USA)(NYSE:KGC) worth $63.78 million. Similar to Barrick Gold Corporation (USA)(NYSE:ABX), the decline in gold prices also weighed heavily on Kinross Gold Corporation (USA)(NYSE:KGC)’s second quarter results, which it reported on July 29. EPS for the quarter came in at a loss of $0.01 on revenue of $755.2 million, compared to EPS of $0.03 on revenue of $911.9 million the company reported for the same quarter last year. On July 31, analysts at Citigroup reiterated their ‘Hold’ rating on the stock, while decreasing their price target to $1.90 from $2.30. Unlike Kopernik Global Investors, Jean-Marie Eveillard’s First Eagle Investment Management, which was again the largest shareholder of Kinross Gold Corporation (USA)(NYSE:KGC) at the end of the first quarter among the hedge funds we track, reduced its holdings in the company by 72% during the second quarter to 18.70 million shares.
Disclosure: None
