Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Newmont Corporation (NYSE:NEM) based on that data and determine whether they were really smart about the stock.
Newmont Corporation (NYSE:NEM) investors should pay attention to a decrease in enthusiasm from smart money lately. Newmont Corporation (NYSE:NEM) was in 48 hedge funds’ portfolios at the end of September. The all time high for this statistic is 55. Our calculations also showed that NEM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s take a glance at the key hedge fund action encompassing Newmont Corporation (NYSE:NEM).
Cliff Asness of AQR Capital Management
Do Hedge Funds Think NEM Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 48 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the previous quarter. By comparison, 55 hedge funds held shares or bullish call options in NEM a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Newmont Corporation (NYSE:NEM) was held by Renaissance Technologies, which reported holding $173.4 million worth of stock at the end of September. It was followed by AQR Capital Management with a $129.4 million position. Other investors bullish on the company included Citadel Investment Group, Two Sigma Advisors, and D E Shaw. In terms of the portfolio weights assigned to each position Heathbridge Capital Management allocated the biggest weight to Newmont Corporation (NYSE:NEM), around 8.49% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, designating 5.16 percent of its 13F equity portfolio to NEM.
Since Newmont Corporation (NYSE:NEM) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there exists a select few funds who were dropping their entire stakes in the third quarter. Interestingly, Ray Dalio’s Bridgewater Associates sold off the biggest position of the 750 funds watched by Insider Monkey, totaling close to $25.1 million in stock. Sander Gerber’s fund, Hudson Bay Capital Management, also cut its stock, about $9.1 million worth. These moves are important to note, as total hedge fund interest fell by 7 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Newmont Corporation (NYSE:NEM). These stocks are Canadian Natural Resources Limited (NYSE:CNQ), National Grid plc (NYSE:NGG), Spotify Technology S.A. (NYSE:SPOT), Dow Inc. (NYSE:DOW), Simon Property Group, Inc (NYSE:SPG), Microchip Technology Incorporated (NASDAQ:MCHP), and Vodafone Group Plc (NASDAQ:VOD). This group of stocks’ market valuations resemble NEM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNQ | 27 | 956988 | 0 |
| NGG | 5 | 314057 | -2 |
| SPOT | 48 | 3038733 | 0 |
| DOW | 42 | 747419 | 2 |
| SPG | 38 | 726426 | 1 |
| MCHP | 41 | 1122273 | -9 |
| VOD | 18 | 613771 | 1 |
| Average | 31.3 | 1074238 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $1074 million. That figure was $774 million in NEM’s case. Spotify Technology S.A. (NYSE:SPOT) is the most popular stock in this table. On the other hand National Grid plc (NYSE:NGG) is the least popular one with only 5 bullish hedge fund positions. Newmont Corporation (NYSE:NEM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NEM is 74.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on NEM as the stock returned 13.8% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
