On a day where all three major indexes are modestly in the red, Freeport-McMoRan Inc. (NYSE:FCX), Las Vegas Sands Corp. (NYSE:LVS), Wynn Resorts, Limited (NASDAQ:WYNN), and Newmont Corporation (NYSE:NEM) all fell substantially more today for different reasons. Although the commerce department’s August retail sales report indicated an overall sales growth of 0.7%, new unemployment claims rose to 332,000. Given the price action of the equities, let’s examine why each stock fell and how hedge funds were positioned amid the stocks to gauge smart money sentiment according to the latest 13F filing period.
Why do we care about hedge fund activity? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Freeport-McMoRan Inc. (NYSE:FCX) fell over 7% today after analysts at Deutsche Bank cut their price target to $46 per share from the previous $47 per share. Also weighing on Freeport-McMoRan Inc. (NYSE:FCX) shares could be the decline in copper, whose futures are down more than 2.7% so far. Although copper futures prices have rallied from August of 2020 to May of 2021 due to the global economic recovery, the commodity price has weakened since its May 2021 highs. Given copper contributes a substantial share of the company’s annual EBITDA, Freeport-McMoRan Inc. (NYSE:FCX)’s profits are affected by copper futures price changes.
Out of the 873 total elite funds we track, 76 owned shares of FCX in the second quarter of 2021, up from 68 in the first quarter of the year. Here’s more details on hedge fund activity surrounding the company.
In other news, Las Vegas Sands Corp. (NYSE:LVS) and Wynn Resorts, Limited (NASDAQ:WYNN) are down 2.5% and 3.78% after each company was downgraded by JPMorgan to ‘Neutral’ from ‘Overweight’.
For Las Vegas Sands Corp. (NYSE:LVS), analyst Joseph Greff cut his price target to $38 from the previous $59 while the same analyst cut his price target for Wynn Resorts, Limited (NASDAQ:WYNN) to $89 from $122. Greff doesn’t like the uncertainty around Macau and believes there could be ‘much lower’ multiples for Macau gaming stocks as a result.
Macau officials recently said they will begin a 45 day public consultation period beginning September 15 to consider legal revisions. One of the topics will be how many concessions will be allowed, the level of supervision that the government will enact, and how long the concessions terms will be. If regulatory control tightens more than expected, Las Vegas Sands Corp. (NYSE:LVS) and Wynn Resorts, Limited (NASDAQ:WYNN) could face headwinds.
As for smart money sentiment, 48 top funds that we track owned shares of Las Vegas Sands in the second quarter of 2021, down from 62 in the first quarter of 2021. Meanwhile, 37 top funds we track owned Wynn Resorts, Limited in the second quarter, down from 49 in the first quarter.
Newmont Corporation (NYSE:NEM) is more than 4.5% in the red due to the decline in gold futures prices. As of noon Eastern time, gold futures are down around 2.2%. Newmont is a leading gold producer with a portfolio of world class assets in top tier jurisdictions and Newmont Corporation’s financial results depends substantially on gold prices. According to an August 2021 investor presentation, Newmont Corporation (NYSE:NEM) believes it could have +$400 million in free cash flow per annum for every $100/oz increase in gold price.
For the filing period ended June 30, 2021, Jean-Marie Eveillard‘s First Eagle Investment Management decreased its holdings by 1% in Newmont Corporation (NYSE:NEM) from the prior period to 18,402,336 shares.
Disclosure: None. This article is originally published at Insider Monkey.
