Royal Gold, Inc (USA) (RGLD): Hedge Funds Are Bearish and Insiders Are Bullish, What Should You Do?

Royal Gold, Inc USA) (NASDAQ:RGLD) was in 21 hedge funds’ portfolio at the end of March. RGLD shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. There were 27 hedge funds in our database with RGLD positions at the end of the previous quarter.

To the average investor, there are plenty of metrics investors can use to monitor publicly traded companies. A duo of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the broader indices by a healthy amount (see just how much).

Just as beneficial, positive insider trading activity is another way to break down the investments you’re interested in. Just as you’d expect, there are plenty of reasons for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if shareholders understand where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action surrounding Royal Gold, Inc USA) (NASDAQ:RGLD).

What have hedge funds been doing with Royal Gold, Inc USA) (NASDAQ:RGLD)?

At Q1’s end, a total of 21 of the hedge funds we track held long positions in this stock, a change of -22% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly.

Of the funds we track, Jean-Marie Eveillard’s First Eagle Investment Management had the most valuable position in Royal Gold, Inc USA) (NASDAQ:RGLD), worth close to $61.6 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $16.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Bart Baum’s Ionic Capital Management, Glenn Russell Dubin’s Highbridge Capital Management and John Burbank’s Passport Capital.

Since Royal Gold, Inc USA) (NASDAQ:RGLD) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there is a sect of fund managers who sold off their entire stakes in Q1. Interestingly, Jim Simons’s Renaissance Technologies dumped the largest stake of all the hedgies we key on, worth about $34.5 million in stock.. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also sold off its stock, about $16.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 6 funds in Q1.

What do corporate executives and insiders think about Royal Gold, Inc USA) (NASDAQ:RGLD)?

Bullish insider trading is most useful when the company in focus has seen transactions within the past half-year. Over the latest half-year time frame, Royal Gold, Inc USA) (NASDAQ:RGLD) has seen 1 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Royal Gold, Inc USA) (NASDAQ:RGLD). These stocks are Agnico-Eagle Mines Limited (USA) (NYSE:AEM), Eldorado Gold Corp (USA) (NYSE:EGO), Franco-Nevada Corporation (NYSE:FNV), Gold Fields Limited (ADR) (NYSE:GFI), and New Gold Inc. (USA) (NYSEAMEX:NGD). This group of stocks are in the gold industry and their market caps resemble RGLD’s market cap.