In this article we will check out the progression of hedge fund sentiment towards Barrick Gold Corporation (NYSE:GOLD) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Barrick Gold Corporation (NYSE:GOLD) shareholders have witnessed a decrease in hedge fund interest recently. Barrick Gold Corporation (NYSE:GOLD) was in 47 hedge funds’ portfolios at the end of June. The all time high for this statistic is 54. Our calculations also showed that GOLD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Bart Baum of Ionic Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s go over the latest hedge fund action regarding Barrick Gold Corporation (NYSE:GOLD).
Do Hedge Funds Think GOLD Is A Good Stock To Buy Now?
At second quarter’s end, a total of 47 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. By comparison, 52 hedge funds held shares or bullish call options in GOLD a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Barrick Gold Corporation (NYSE:GOLD), with a stake worth $248 million reported as of the end of June. Trailing Renaissance Technologies was Platinum Asset Management, which amassed a stake valued at $197.7 million. Citadel Investment Group, Millennium Management, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to Barrick Gold Corporation (NYSE:GOLD), around 7.76% of its 13F portfolio. Platinum Asset Management is also relatively very bullish on the stock, dishing out 4.57 percent of its 13F equity portfolio to GOLD.
Judging by the fact that Barrick Gold Corporation (NYSE:GOLD) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few funds that elected to cut their full holdings last quarter. Intriguingly, Richard Oldfield’s Oldfield Partners dropped the largest position of all the hedgies followed by Insider Monkey, comprising close to $94.2 million in stock, and Stanley Druckenmiller’s Duquesne Capital was right behind this move, as the fund dropped about $71.4 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 2 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Barrick Gold Corporation (NYSE:GOLD). These stocks are Cognizant Technology Solutions Corp (NASDAQ:CTSH), AFLAC Incorporated (NYSE:AFL), HP Inc. (NYSE:HPQ), Palo Alto Networks Inc (NASDAQ:PANW), Mizuho Financial Group Inc. (NYSE:MFG), Suncor Energy Inc. (NYSE:SU), and Discover Financial Services (NYSE:DFS). All of these stocks’ market caps are similar to GOLD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTSH | 41 | 2996454 | 8 |
| AFL | 33 | 268048 | -3 |
| HPQ | 39 | 1276740 | -4 |
| PANW | 69 | 4720641 | 5 |
| MFG | 6 | 15041 | 1 |
| SU | 32 | 1115960 | -1 |
| DFS | 37 | 450985 | -8 |
| Average | 36.7 | 1549124 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.7 hedge funds with bullish positions and the average amount invested in these stocks was $1549 million. That figure was $1235 million in GOLD’s case. Palo Alto Networks Inc (NASDAQ:PANW) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 6 bullish hedge fund positions. Barrick Gold Corporation (NYSE:GOLD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GOLD is 61.7. 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 through November 5th and beat the market again by 3.1 percentage points. Unfortunately GOLD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GOLD were disappointed as the stock returned -4.1% since the end of June (through 11/5) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
