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Eldorado Gold Corp (USA) (NYSE:EGO): Are Hedge Funds Right About This Stock?

Is Eldorado Gold Corp (USA) (NYSE:EGO) a buy, sell, or hold? Money managers are becoming less confident. The number of long hedge fund positions stayed the same which is a slightly negative development in our experience

Eldorado Gold Corp (USA) (NYSE:EGO)

To most shareholders, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds trading at the moment, we hone in on the crème de la crème of this club, around 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total capital, and by paying attention to their top picks, we have uncovered a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Just as important, positive insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are a variety of motivations for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if piggybackers understand where to look (learn more here).

Consequently, let’s take a gander at the key action surrounding Eldorado Gold Corp (USA) (NYSE:EGO).

What does the smart money think about Eldorado Gold Corp (USA) (NYSE:EGO)?

At year’s end, a total of 17 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably.

Of the funds we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Eldorado Gold Corp (USA) (NYSE:EGO). First Eagle Investment Management has a $46 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $18 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Trey Reik’s Bristol Investment Partners, Michael Hintze’s CQS Cayman LP and Michael Katz’s Glenrock Global Partners.

Due to the fact that Eldorado Gold Corp (USA) (NYSE:EGO) has witnessed a declination in interest from the smart money, we can see that there were a few hedgies that slashed their entire stakes last quarter. Intriguingly, SAC Subsidiary’s CR Intrinsic Investors cut the biggest investment of the 450+ funds we watch, valued at an estimated $2 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund said goodbye to about $1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Eldorado Gold Corp (USA) (NYSE:EGO)?

Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time period, Eldorado Gold Corp (USA) (NYSE:EGO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the returns shown by our studies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Eldorado Gold Corp (USA) (NYSE:EGO) 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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