Moving On From Valeant’s Drop: Hedge Funds Like These Five Stocks With Great Q1 Returns

#3 Freeport-McMoRan Inc (NYSE:FCX)

– Investors With Long Positions (as of December 31): 37

– Aggregate Value of Investors’ Holdings (as of December 31): $1.04 billion

After declining consistently since 2011, Freeport-McMoRan Inc (NYSE:FCX)’s stock has finally managed to change its trajectory this year by registering gains of 52.73% in the first three months of 2016. Carl Icahn‘s Icahn Capital initiated a stake in Freeport-McMoRan Inc (NYSE:FCX) during the third quarter of 2015 and increased it by 4% to 104 million shares during the fourth quarter. In the last couple of months the company has made considerable progress in reducing its debt burden by selling some of its assets. However, analysts think that it still needs to work hard towards bringing down its debt in order to improve its liquidity profile. According to the company’s last 10-K filing, it had over $20 billion of debt on its balance sheet and incurred an interest cost of $866 million on it last year.

#2 J C Penney Company Inc (NYSE:JCP)

– Investors With Long Positions (as of December 31): 27

– Aggregate Value of Investors’ Holdings (as of December 31): $272.6 million

Moving on, J C Penney Company Inc (NYSE:JCP) saw its stock decline by 28% in the fourth quarter of 2015. During the same period, the ownership of the company among investors covered by us declined by eight and the aggregate value of their holdings fell by 35%. However, the funds that remained bullish, such as billionaire Jim Simons‘ Renaissance Technologies (which increased its stake in the company by 23% to nearly 18 million shares during the fourth quarter) are enjoying the rewards on the back of the 66% gains registered by the stock during the January-March period. The quick turnaround exhibited in J C Penney Company’s last quarterly results has impressed most analysts and investors, who expect a number of tailwinds that are yet to materialize like the growing share of private brands in its portfolio and its plan to reduce debt leverage by 44% in the next two years.

#1 Barrick Gold Corporation (USA) (NYSE:ABX)

– Investors With Long Positions (as of December 31): 40

– Aggregate Value of Investors’ Holdings (as of December 31): $1.15 billion

The 33% depreciation in the price of gold between 2012 and 2015 took a heavy toll on gold mining companies with most of them losing over two-thirds of their market capitalization during that period. While those declines caused most investors to shun gold mining stocks like Barrick Gold Corporation (USA) (NYSE:ABX), nearly 5% of the hedge funds tracked by us held on to their conviction in the stock going into 2016. The conviction of these funds has paid off handsomely this year, with shares of Barrick Gold Corporation (USA) (NYSE:ABX) appreciating by almost 85% in the first quarter. Among the funds which bought the stock in the nick of time was Hugh Sloane‘s Sloane Robinson Investment Management, which initiated a stake in Barrick Gold Corporation during the fourth quarter by purchasing 1.66 million shares. The company has been recently in the news after the local media in Argentina published a government document revealing that the company’s Veladero mine, which suffered a cyanide spill last September and for which Barrick Gold Corporation was fined $9.8 million, had three cyanide leaks during the 2011-2012. After the news became public, the company immediately issued a statement saying that those leaks were contained by the mine’s control systems. On April 1, analysts at Canaccord Genuity reiterated their ‘Buy’ rating on the stock and raised their price target to $21.50 from $21.

Disclosure: None