In this article we will check out the progression of hedge fund sentiment towards Osisko Gold Royalties Ltd (NYSE:OR) 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.
Is Osisko Gold Royalties Ltd (NYSE:OR) going to take off soon? Prominent investors were taking a bullish view. The number of bullish hedge fund positions increased by 2 recently. Osisko Gold Royalties Ltd (NYSE:OR) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that OR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 16 hedge funds in our database with OR positions at the end of the fourth quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Fred DiSanto of Ancora Advisors
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Do Hedge Funds Think OR Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the fourth quarter of 2020. On the other hand, there were a total of 13 hedge funds with a bullish position in OR a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Osisko Gold Royalties Ltd (NYSE:OR), which was worth $56.2 million at the end of the fourth quarter. On the second spot was Sprott Asset Management which amassed $53.6 million worth of shares. Sun Valley Gold, Renaissance Technologies, and Citadel Investment Group 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 Sun Valley Gold allocated the biggest weight to Osisko Gold Royalties Ltd (NYSE:OR), around 8.82% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, designating 3.21 percent of its 13F equity portfolio to OR.
As one would reasonably expect, some big names have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, created the most valuable position in Osisko Gold Royalties Ltd (NYSE:OR). Citadel Investment Group had $3.6 million invested in the company at the end of the quarter. Frederick DiSanto’s Ancora Advisors also initiated a $2.1 million position during the quarter. The other funds with new positions in the stock are Richard C. Patton’s Courage Capital, Mitch Cantor’s Mountain Lake Investment Management, and Michael Gelband’s ExodusPoint Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Osisko Gold Royalties Ltd (NYSE:OR). We will take a look at Embraer SA (NYSE:ERJ), Euronav NV (NYSE:EURN), Aurora Cannabis Inc. (NASDAQ:ACB), MFA Financial, Inc. (NYSE:MFA), Capitol Federal Financial, Inc. (NASDAQ:CFFN), SiTime Corporation (NASDAQ:SITM), and Granite Construction Incorporated (NYSE:GVA). This group of stocks’ market values resemble OR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ERJ | 14 | 224549 | 3 |
| EURN | 17 | 93365 | 3 |
| ACB | 12 | 48845 | 2 |
| MFA | 16 | 104285 | -6 |
| CFFN | 12 | 89757 | 2 |
| SITM | 20 | 156794 | 9 |
| GVA | 13 | 29407 | 2 |
| Average | 14.9 | 106715 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $165 million in OR’s case. SiTime Corporation (NASDAQ:SITM) is the most popular stock in this table. On the other hand Aurora Cannabis Inc. (NASDAQ:ACB) is the least popular one with only 12 bullish hedge fund positions. Osisko Gold Royalties Ltd (NYSE:OR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OR is 74.5. 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 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Hedge funds were also right about betting on OR, though not to the same extent, as the stock returned 18.3% since Q1 (through July 23rd) and outperformed the market as well.
Follow Osisko Gold Royalties Ltd (NYSE:OR)
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Disclosure: None. This article was originally published at Insider Monkey.
