In this article we are going to use hedge fund sentiment as a tool and determine whether Pretium Resources Inc (NYSE:PVG) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Pretium Resources Inc (NYSE:PVG) shareholders have witnessed a decrease in hedge fund interest in recent months. Pretium Resources Inc (NYSE:PVG) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 25. There were 22 hedge funds in our database with PVG holdings at the end of June. Our calculations also showed that PVG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Eric Sprott of Sprott Asset Management
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. Keeping this in mind we’re going to go over the recent hedge fund action encompassing Pretium Resources Inc (NYSE:PVG).
Do Hedge Funds Think PVG Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the second quarter of 2021. On the other hand, there were a total of 20 hedge funds with a bullish position in PVG a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Eric Sprott’s Sprott Asset Management has the number one position in Pretium Resources Inc (NYSE:PVG), worth close to $43.1 million, amounting to 2.8% of its total 13F portfolio. On Sprott Asset Management’s heels is John Paulson of Paulson & Co, with a $23.1 million position; 0.7% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions comprise Peter Franklin Palmedo’s Sun Valley Gold, Roberto Mignone’s Bridger Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Sun Valley Gold allocated the biggest weight to Pretium Resources Inc (NYSE:PVG), around 6.51% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, dishing out 2.83 percent of its 13F equity portfolio to PVG.
Because Pretium Resources Inc (NYSE:PVG) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of hedgies that decided to sell off their positions entirely heading into Q4. Intriguingly, Israel Englander’s Millennium Management dropped the largest position of the 750 funds watched by Insider Monkey, worth an estimated $0.2 million in stock. Matthew L Pinz’s fund, Pinz Capital, also cut its stock, about $0.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pretium Resources Inc (NYSE:PVG) but similarly valued. These stocks are Bed Bath & Beyond Inc. (NASDAQ:BBBY), Acadia Realty Trust (NYSE:AKR), Great Western Bancorp Inc (NYSE:GWB), Lakeland Financial Corporation (NASDAQ:LKFN), ModusLink Global Solutions, Inc. (NASDAQ:MLNK), istar Inc (NYSE:STAR), and Middlesex Water Company (NASDAQ:MSEX). This group of stocks’ market caps are closest to PVG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BBBY | 17 | 122185 | -4 |
| AKR | 12 | 45059 | 2 |
| GWB | 17 | 61101 | 7 |
| LKFN | 9 | 8602 | -1 |
| MLNK | 12 | 103924 | 12 |
| STAR | 21 | 141387 | 3 |
| MSEX | 5 | 52027 | -3 |
| Average | 13.3 | 76326 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $124 million in PVG’s case. istar Inc (NYSE:STAR) is the most popular stock in this table. On the other hand Middlesex Water Company (NASDAQ:MSEX) is the least popular one with only 5 bullish hedge fund positions. Pretium Resources Inc (NYSE:PVG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PVG is 79.2. 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 PVG as the stock returned 46.2% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Penn Virginia Gp Holdings L.p. (NYSE:PVG)
Follow Penn Virginia Gp Holdings L.p. (NYSE:PVG)
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Disclosure: None. This article was originally published at Insider Monkey.
