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Eldorado Gold Corp (USA) (EGO): Hedge Funds and Insiders Are Bearish, What Should You Do?

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Eldorado Gold Corp (USA) (NYSE:EGO) was in 19 hedge funds’ portfolio at the end of March. EGO has seen a decrease in activity from the world’s largest hedge funds of late. There were 19 hedge funds in our database with EGO positions at the end of the previous quarter.

Eldorado Gold Corp (USA) (NYSE:EGO)According to most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of the past. While there are over 8000 funds trading at the moment, we at Insider Monkey hone in on the masters of this group, close to 450 funds. It is estimated that this group has its hands on most of the smart money’s total capital, and by keeping an eye on their highest performing equity investments, we have revealed a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as beneficial, bullish insider trading activity is a second way to parse down the stock market universe. Obviously, there are a variety of motivations for an insider to drop shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the valuable potential of this method if you know where to look (learn more here).

Consequently, it’s important to take a glance at the latest action regarding Eldorado Gold Corp (USA) (NYSE:EGO).

Hedge fund activity in Eldorado Gold Corp (USA) (NYSE:EGO)

Heading into Q2, a total of 19 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes significantly.

When looking at the hedgies we track, Jean-Marie Eveillard’s First Eagle Investment Management had the biggest position in Eldorado Gold Corp (USA) (NYSE:EGO), worth close to $46.6 million, comprising 0.2% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $13.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Michael Hintze’s CQS Cayman LP.

Seeing as Eldorado Gold Corp (USA) (NYSE:EGO) has experienced declining sentiment from hedge fund managers, logic holds that there exists a select few money managers that decided to sell off their full holdings at the end of the first quarter. Interestingly, Sander Gerber’s Hudson Bay Capital Management dumped the biggest stake of the “upper crust” of funds we key on, worth an estimated $0.6 million in stock.. Sander Gerber’s fund, Hudson Bay Capital Management, also sold off its call options., about $0.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Eldorado Gold Corp (USA) (NYSE:EGO)?

Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time frame, Eldorado Gold Corp (USA) (NYSE:EGO) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Eldorado Gold Corp (USA) (NYSE:EGO). These stocks are Gold Fields Limited (ADR) (NYSE:GFI), Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), Franco-Nevada Corporation (NYSE:FNV), Compania de Minas Buenaventura SA (ADR) (NYSE:BVN), and Agnico-Eagle Mines Limited (USA) (NYSE:AEM). This group of stocks are in the gold industry and their market caps resemble EGO’s market cap.

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