Yamana Gold Inc. (USA) (AUY): Are Hedge Funds Right About This Stock?

Yamana Gold Inc. (USA) (NYSE:AUY) investors: listen up.

To the average investor, there are a multitude of methods investors can use to track their holdings. Some of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can outperform their index-focused peers by a superb amount (see just how much).

Just as necessary, optimistic insider trading sentiment is a second way to look at the investments you’re interested in. Just as you’d expect, there are a variety of reasons for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if you know what to do (learn more here).

What’s more, we’re going to discuss the newest info for Yamana Gold Inc. (USA) (NYSE:AUY).

Hedge fund activity in Yamana Gold Inc. (USA) (NYSE:AUY)

At the end of the second quarter, a total of 24 of the hedge funds we track were bullish in this stock, a change of -4% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially.

When using filings from the hedgies we track, Seth Klarman’s Baupost Group had the biggest position in Yamana Gold Inc. (USA) (NYSE:AUY), worth close to $31 million, comprising 0.8% of its total 13F portfolio. On Baupost Group’s heels is Dreman Value Management, managed by David Dreman, which held a $6.9 million position; 0.2% of its 13F portfolio is allocated to the company. Other peers that hold long positions include John Burbank’s Passport Capital, Matthew Hulsizer’s PEAK6 Capital Management and Steven Cohen’s SAC Capital Advisors.

Because Yamana Gold Inc. (USA) (NYSE:AUY) has witnessed dropping sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of money managers that elected to cut their full holdings last quarter. At the top of the heap, Jeffrey Vinik’s Vinik Asset Management cut the biggest investment of all the hedgies we key on, comprising an estimated $29.2 million in stock. Richard Chilton’s fund, Chilton Investment Company, also dumped its stock, about $23.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.

Insider trading activity in Yamana Gold Inc. (USA) (NYSE:AUY)

Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time period, Yamana Gold Inc. (USA) (NYSE:AUY) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Yamana Gold Inc. (USA) (NYSE:AUY). These stocks are Agnico-Eagle Mines Limited (USA) (NYSE:AEM), Compania de Minas Buenaventura SA (ADR) (NYSE:BVN), Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), AngloGold Ashanti Limited (ADR) (NYSE:AU), and Kinross Gold Corporation (USA) (NYSE:KGC). This group of stocks are the members of the gold industry and their market caps match AUY’s market cap.

Using the returns shown by the previously mentioned studies, average investors should always pay attention to hedge fund and insider trading sentiment, and Yamana Gold Inc. (USA) (NYSE:AUY) is no exception.

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