Wheaton Precious Metals Corp. (WPM) Fell Out Of Favor With Hedge Funds

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Wheaton Precious Metals Corp. (NYSE:WPM) based on those filings.

Wheaton Precious Metals Corp. (NYSE:WPM) has experienced a decrease in support from the world’s most elite money managers of late. Wheaton Precious Metals Corp. (NYSE:WPM) was in 28 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 34. Our calculations also showed that WPM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

David Iben of Kopernik Global Investors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. Now let’s check out the new hedge fund action encompassing Wheaton Precious Metals Corp. (NYSE:WPM).

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

At the end of March, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards WPM over the last 23 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

The largest stake in Wheaton Precious Metals Corp. (NYSE:WPM) was held by Horizon Asset Management, which reported holding $95.9 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $72.9 million position. Other investors bullish on the company included Kopernik Global Investors, Sprott Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position 0 allocated the biggest weight to Wheaton Precious Metals Corp. (NYSE:WPM), around 7.15% of its 13F portfolio. 0 is also relatively very bullish on the stock, designating 3.88 percent of its 13F equity portfolio to WPM.

Due to the fact that Wheaton Precious Metals Corp. (NYSE:WPM) has witnessed a decline in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that elected to cut their full holdings heading into Q2. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest stake of the 750 funds tracked by Insider Monkey, totaling about $201.4 million in stock. Frank Fu’s fund, CaaS Capital, also sold off its stock, about $3.7 million worth. These moves are interesting, as aggregate hedge fund interest fell by 6 funds heading into Q2.

Let’s now take a look at hedge fund activity in other stocks similar to Wheaton Precious Metals Corp. (NYSE:WPM). These stocks are ON Semiconductor Corporation (NASDAQ:ON), Quest Diagnostics Incorporated (NYSE:DGX), Bio-Rad Laboratories, Inc. (NYSE:BIO), Celanese Corporation (NYSE:CE), Healthpeak Properties, Inc. (NYSE:PEAK), Albemarle Corporation (NYSE:ALB), and Rollins, Inc. (NYSE:ROL). This group of stocks’ market caps are similar to WPM’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $655 million. That figure was $440 million in WPM’s case. Bio-Rad Laboratories, Inc. (NYSE:BIO) is the most popular stock in this table. On the other hand Healthpeak Properties, Inc. (NYSE:PEAK) is the least popular one with only 18 bullish hedge fund positions. Wheaton Precious Metals Corp. (NYSE:WPM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WPM is 42.9. 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 24% in 2021 through July 9th and beat the market by 6.7 percentage points. A small number of hedge funds were also right about betting on WPM, though not to the same extent, as the stock returned 16.7% since the end of Q1 (through July 9th) and outperformed the market.

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

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