Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 of 2018 due to various reasons. Nevertheless, the data show elite investors' consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by more than 8 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Barrick Gold Corporation (NYSE:GOLD) from the perspective of those elite funds.
Barrick Gold Corporation (NYSE:GOLD) was in 42 hedge funds' portfolios at the end of the third quarter of 2019. GOLD shareholders have witnessed an increase in hedge fund sentiment of late. There were 39 hedge funds in our database with GOLD positions at the end of the previous quarter. Our calculations also showed that GOLD isn't among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Crispin Odey of Odey Asset Management Group[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's analyze the key hedge fund action surrounding Barrick Gold Corporation (NYSE:GOLD).
How have hedgies been trading Barrick Gold Corporation (NYSE:GOLD)?
At Q3's end, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. By comparison, 33 hedge funds held shares or bullish call options in GOLD a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
No of Hedge Funds with GOLD Positions
More specifically, Renaissance Technologies was the largest shareholder of Barrick Gold Corporation (NYSE:GOLD), with a stake worth $260.3 million reported as of the end of September. Trailing Renaissance Technologies was Slate Path Capital, which amassed a stake valued at $169.7 million. Adage Capital Management, Odey Asset Management Group, 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 Odey Asset Management Group allocated the biggest weight to Barrick Gold Corporation (NYSE:GOLD), around 13.16% of its portfolio. Slate Path Capital is also relatively very bullish on the stock, dishing out 11.24 percent of its 13F equity portfolio to GOLD.
Now, some big names have been driving this bullishness. International Value Advisers, managed by Charles de Vaulx, initiated the largest position in Barrick Gold Corporation (NYSE:GOLD). International Value Advisers had $43.5 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $14.7 million position during the quarter. The following funds were also among the new GOLD investors: Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Benjamin A. Smith's Laurion Capital Management, and Donald Sussman's Paloma Partners.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Barrick Gold Corporation (NYSE:GOLD) but similarly valued. We will take a look at Credit Suisse Group AG (NYSE:CS), SunTrust Banks, Inc. (NYSE:STI), O'Reilly Automotive, Inc. (NASDAQ:ORLY), and Regeneron Pharmaceuticals Inc (NASDAQ:REGN). This group of stocks' market valuations are similar to GOLD's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CS,14,226949,3 STI,31,1100197,0 ORLY,42,2055261,-8 REGN,33,869893,-4 Average,30,1063075,-2.25 [/table]
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1063 million. That figure was $1444 million in GOLD's case. O'Reilly Automotive, Inc. (NASDAQ:ORLY) is the most popular stock in this table. On the other hand Credit Suisse Group AG (NYSE:CS) is the least popular one with only 14 bullish hedge fund positions. Barrick Gold Corporation (NYSE:GOLD) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately GOLD wasn't nearly as popular as these 20 stocks and hedge funds that were betting on GOLD were disappointed as the stock returned -4.8% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
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