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Barrick Gold Corporation (USA) (NYSE:ABX): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Barrick Gold Corporation (USA) (NYSE:ABX) was in 40 hedge funds’ portfolio at the end of December. ABX shareholders have witnessed an increase in enthusiasm from smart money of late. There were 38 hedge funds in our database with ABX holdings at the end of the previous quarter.

If you’d ask most investors, hedge funds are perceived as slow, old financial vehicles of years past. While there are over 8000 funds in operation at the moment, we look at the crème de la crème of this club, about 450 funds. It is estimated that this group oversees the lion’s share of the smart money’s total asset base, and by paying attention to their best picks, we have unearthed a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Barrick Gold Corporation (USA) (NYSE:ABX)

Equally as integral, bullish insider trading sentiment is a second way to parse down the stock market universe. There are plenty of incentives for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this strategy if you understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a look at the key action encompassing Barrick Gold Corporation (USA) (NYSE:ABX).

How have hedgies been trading Barrick Gold Corporation (USA) (NYSE:ABX)?

At the end of the fourth quarter, a total of 40 of the hedge funds we track were long in this stock, a change of 5% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.

When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the biggest position in Barrick Gold Corporation (USA) (NYSE:ABX). First Eagle Investment Management has a $136 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Platinum Asset Management, managed by Kerr Neilson, which held a $102 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Jeffrey Vinik’s Vinik Asset Management, Daniel Bubis’s Tetrem Capital Management and David Einhorn’s Greenlight Capital.

As industrywide interest jumped, key money managers have jumped into Barrick Gold Corporation (USA) (NYSE:ABX) headfirst. Renaissance Technologies, managed by Jim Simons, created the biggest position in Barrick Gold Corporation (USA) (NYSE:ABX). Renaissance Technologies had 57 million invested in the company at the end of the quarter. Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors also initiated a $26 million position during the quarter. The other funds with brand new ABX positions are Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Phill Gross and Robert Atchinson’s Adage Capital Management, and Glenn Russell Dubin’s Highbridge Capital Management.

Insider trading activity in Barrick Gold Corporation (USA) (NYSE:ABX)

Insider buying is best served when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time frame, Barrick Gold Corporation (USA) (NYSE:ABX) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Barrick Gold Corporation (USA) (NYSE:ABX) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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