Were Hedge Funds Right About Agnico Eagle Mines Limited (AEM)?

We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Agnico Eagle Mines Limited (NYSE:AEM) and determine whether hedge funds skillfully traded this stock.

Agnico Eagle Mines Limited (NYSE:AEM) investors should pay attention to an increase in support from the world’s most elite money managers recently. Agnico Eagle Mines Limited (NYSE:AEM) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. Our calculations also showed that AEM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Ken Griffin of Citadel Investment Group

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. Now let’s take a gander at the key hedge fund action regarding Agnico Eagle Mines Limited (NYSE:AEM).

Do Hedge Funds Think AEM Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the previous quarter. By comparison, 28 hedge funds held shares or bullish call options in AEM a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the most valuable position in Agnico Eagle Mines Limited (NYSE:AEM). Renaissance Technologies has a $133.2 million position in the stock, comprising 0.2% of its 13F portfolio. On Renaissance Technologies’s heels is Alpine Associates, led by Robert Emil Zoellner, holding a $45.9 million position; 1.5% of its 13F portfolio is allocated to the company. Other peers that hold long positions contain Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to Agnico Eagle Mines Limited (NYSE:AEM), around 1.84% of its 13F portfolio. Alpine Associates is also relatively very bullish on the stock, designating 1.49 percent of its 13F equity portfolio to AEM.

As industrywide interest jumped, specific money managers have jumped into Agnico Eagle Mines Limited (NYSE:AEM) headfirst. Alpine Associates, managed by Robert Emil Zoellner, initiated the most valuable position in Agnico Eagle Mines Limited (NYSE:AEM). Alpine Associates had $45.9 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $23.6 million position during the quarter. The other funds with brand new AEM positions are Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, and Carl Tiedemann and Michael Tiedemann’s TIG Advisors.

Let’s check out hedge fund activity in other stocks similar to Agnico Eagle Mines Limited (NYSE:AEM). We will take a look at Campbell Soup Company (NYSE:CPB), LPL Financial Holdings Inc (NASDAQ:LPLA), Jones Lang LaSalle Inc (NYSE:JLL), Iron Mountain Incorporated (NYSE:IRM), Enel Americas S.A. (NYSE:ENIA), Tenaris S.A. (NYSE:TS), and Opendoor Technologies Inc. (NASDAQ:OPEN). This group of stocks’ market valuations are closest to AEM’s market valuation.

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As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $895 million. That figure was $416 million in AEM’s case. LPL Financial Holdings Inc (NASDAQ:LPLA) is the most popular stock in this table. On the other hand Enel Americas S.A. (NYSE:ENIA) is the least popular one with only 9 bullish hedge fund positions. Agnico Eagle Mines Limited (NYSE:AEM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AEM is 79.4. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 3.6 percentage points. Unfortunately, AEM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AEM were disappointed as the stock returned -7.2% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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