Kopernik Global Investors is a hedge fund managed by David Iben, who used to work for Jeff Vinik’s Vinik Asset Management until it was shuttered in 2013. Most of the employees at Kopernik are former Vinik personnel; in fact, Mr. Vinik himself has provided $20 million in seed capital.
In its last 13F filing, Kopernik disclosed ownership of more than $181 million in stock, mainly from basic materials companies (65.9% of its total equity portfolio). Let’s take a look at its three largest equity positions and their performances over the past few months.
Mr. Iben’s largest bet is placed on Peabody Energy Corporation (NYSE:BTU), a $4 billion market cap, thermal coal mining company. The fund last disclosed ownership of 1.4 million shares of Peabody Energy Corporation (NYSE:BTU), worth more than $20.9 million at current stock prices. After Kopernik increased its exposure to the company by 1,374% on the quarter, the stake accounts for 12.6% of its equity portfolio’s total value.
Before this boost, the fund’s position in Peabody Energy Corporation (NYSE:BTU) was almost insignificant. However, the increase does not seem particularly wise looking back; since the end of the first quarter of 2014, the stock is down 7.57%. Year-to-date, the loss has been even larger: 23.71%.
Another hedge fund that has an even larger position in Peabody Energy Corporation (NYSE:BTU) is Doug Silverman and Alexander Klabin’s Senator Investment Group, which declared having purchased 15 million shares of the company on June 11. Since that date, the stock price has plunged by 7.8%.
Nonetheless, these hedge funds seem to be betting on the long run. Analysts expect Peabody Energy Corporation (NYSE:BTU)’s stock price to reach the $20 threshold over the next 12 months; this implies an upside potential of roughly 35%.
The second largest position in Kopernik’s portfolio, Newmont Mining Corp (NYSE:NEM), was added during the first quarter of 2014. This $12.66 billion market cap, gold and copper production and exploration company saw the fund acquire 931,583 shares over the first quarter. The position is currently worth $23.42 million, after having gained 5.18% since March 31, 2014, and 9.25%, year-to-date. Moreover, analysts expect Newmont Mining Corp (NYSE:NEM)’s stock price to increase, at least by an extra 8% over the upcoming year.
Another fund that stands to benefit from Newmont Mining Corp (NYSE:NEM)’s stock’s past and future performance is William B. Gray’s Orbis Investment Management, which started a position with 9.68 million shares, over the first quarter of 2014.
In the third spot is Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR.B) –also known as Electrobras, a $1.38 billion market cap electric energy company of which Mr. Iben’s fund owns 3.83 million shares, worth roughly $19.35 million at current stock prices. Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR.B)’s stock is up 14.55% year-to-date, and 7.23% since March 31, 2014, but growth projections going forward are not very encouraging.
Nonetheless, several major hedge funds are betting on Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR.B). Amongst them I would like to highlight Arrowstreet Capital, which last disclosed ownership of almost 3 million shares.
Disclosure: Javier Hasse holds no position in any stocks mentioned
