In this article we will take a look at whether hedge funds think Platinum Group Metals Limited (NYSE:PLG) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Hedge fund interest in Platinum Group Metals Limited (NYSE:PLG) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare PLG to other stocks including Hill International Inc (NYSE:HIL), Manitex International, Inc. (NASDAQ:MNTX), and IDEAYA Biosciences, Inc. (NASDAQ:IDYA) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are viewed as slow, outdated investment vehicles of years past. While there are over 8000 funds in operation at the moment, Our experts hone in on the moguls of this group, about 850 funds. It is estimated that this group of investors handle the lion’s share of the hedge fund industry’s total capital, and by shadowing their best stock picks, Insider Monkey has come up with various investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Michael Hintze of CQS Cayman LP
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s analyze the fresh hedge fund action encompassing Platinum Group Metals Limited (NYSE:PLG).
How have hedgies been trading Platinum Group Metals Limited (NYSE:PLG)?
At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 4 hedge funds with a bullish position in PLG a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Platinum Group Metals Limited (NYSE:PLG) was held by Sprott Asset Management, which reported holding $2.7 million worth of stock at the end of September. It was followed by CQS Cayman LP with a $0.9 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let’s also examine hedge fund activity in other stocks similar to Platinum Group Metals Limited (NYSE:PLG). We will take a look at Hill International Inc (NYSE:HIL), Manitex International, Inc. (NASDAQ:MNTX), IDEAYA Biosciences, Inc. (NASDAQ:IDYA), and HireQuest, Inc. (NASDAQ:HQI). All of these stocks’ market caps match PLG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HIL | 10 | 26366 | -3 |
| MNTX | 7 | 7980 | 1 |
| IDYA | 6 | 12292 | -3 |
| HQI | 2 | 711 | 0 |
| Average | 6.25 | 11837 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $4 million in PLG’s case. Hill International Inc (NYSE:HIL) is the most popular stock in this table. On the other hand HireQuest, Inc. (NASDAQ:HQI) is the least popular one with only 2 bullish hedge fund positions. Platinum Group Metals Limited (NYSE:PLG) is not the least popular stock in this group but hedge fund interest is still below average. 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 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on PLG as the stock returned 22.1% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
