David B. Iben’s Kopernik Global Investors has filed its 13F for the reporting period as of the end of the first quarter of 2015. The firm started investing client’s money in July 2013 under the leadership of Iben, its founder, who also serves as the firm’s chief investment officer and lead portfolio manager. The investment manager’s equity portfolio stands at $399 million as of the current reporting period. Basic materials stocks, the top holdings of which we’ll discuss in this article, hold the largest percentage of the fund’s investment, followed by the energy and transport sectors. The top ten holdings of Kopernik Global Investors account for 84.14% of the overall market value of its portfolio.
Professional investors like Iben spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. A portfolio of the 15 most popular small-cap stocks among funds outperformed the S&P 500 Total Return Index by 95 basis points per month between 1999 and 2012 in backtesting. The exceptional results of this strategy got even better in forward testing after the strategy went live at the end of August 2012. A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 137% and beaten the market by more than 82 percentage points since then, and by 4.6 percentage points in the first quarter of this year (see the details).
Barrick Gold Corporation (USA) (NYSE:ABX) is the largest basic materials stock holding of Kopernik. The fund had an investment of $57.46 million in Barrick Gold consisting of 5.24 million shares of the company, which accounted for 14.39% of the fund’s portfolio. Barrick Gold Corporation (USA) (NYSE:ABX) reported its first quarter 2015 financial results on April 27, reporting net revenue of $2.24 billion along with net income of $57 million for the quarter, with net adjusted earnings coming in at $62 million. First Eagle Investment Management, Renaissance Technologies, and D E Shaw are among the funds holding large positions in Barrick Gold Corporation (USA) (NYSE:ABX).
Kinross Gold Corporation (USA) (NYSE:KGC) is the second largest basic materials stock holding of the fund. It is the seventh-largest gold company in the world, with its primary operations in the United States, Brazil, Ghana, Chile, Russia, and Mauritania. Kopernik held 16.56 million shares of the gold producer at the end of the first quarter with a market value of $37.10 million. Kinross Gold Corporation (USA) (NYSE:KGC) reported net revenue of $781.4 million in the first quarter of 2015 against revenue of $817.4 million in the prior year’s quarter. Net earnings were lower as well, at $15.3 million in comparison to last year’s quarterly earnings of $34.1 million. First Eagle Investment Management and Renaissance Technologies are among the primary investors of Kinross Gold Corporation (USA) (NYSE:KGC).
Turquoise Hill Resources Ltd (NYSE:TRQ) comes in at number three in the ranking of the largest basic materials holdings of Kopernik Global Investors. Turquoise is a mineral exploration company headquartered in Vancouver, BC, Canada that has been active for the past two decades. The fund had 8.99 million shares of Turquoise Hill Resources Ltd (NYSE:TRQ) in its portfolio with a market value of $28.06 million. The shares of the Canadian mining company have grown 38.55% year-to-date, lifting its market cap to $8.70 billion. Turquoise Hill had a minor setback earlier this week after its deal to sell-off its remaining shares of Mongolian coal miner SouthGobi Resources fell through. Turquoise Hill has been trying to unload its stake in SouthGobi primarily because of the declining share value of the coal miner. Some of the other major investors of Turquoise Hill Resources Ltd (NYSE:TRQ) include Pentwater Capital Management, Mason Capital Management, and Dalton Investments.
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