Is Franco-Nevada Corporation (NYSE:FNV) a cheap investment now? The best stock pickers are becoming less hopeful. The number of bullish hedge fund bets shrunk by 1 recently.
In the 21st century investor’s toolkit, there are plenty of metrics market participants can use to track Mr. Market. Two of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can outclass the market by a healthy margin (see just how much).
Just as integral, bullish insider trading activity is a second way to parse down the marketplace. There are a variety of reasons for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
Now, we’re going to take a peek at the key action surrounding Franco-Nevada Corporation (NYSE:FNV).
How are hedge funds trading Franco-Nevada Corporation (NYSE:FNV)?
Heading into 2013, a total of 10 of the hedge funds we track were bullish in this stock, a change of -9% from the third quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, Murray Stahl’s Horizon Asset Management had the biggest position in Franco-Nevada Corporation (NYSE:FNV), worth close to $64 million, comprising 2% of its total 13F portfolio. Coming in second is First Eagle Investment Management, managed by Jean-Marie Eveillard, which held a $57 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Chuck Royce’s Royce & Associates, Jeffrey Vinik’s Vinik Asset Management and Jim Simons’s Renaissance Technologies.
Seeing as Franco-Nevada Corporation (NYSE:FNV) has experienced falling interest from the smart money, it’s safe to say that there exists a select few money managers that elected to cut their full holdings at the end of the year. It’s worth mentioning that Peter J. Eichler Jr.’s Aletheia Research and Management cut the biggest position of all the hedgies we watch, worth about $34 million in stock. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds at the end of the year.
What have insiders been doing with Franco-Nevada Corporation (NYSE:FNV)?
Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time frame, Franco-Nevada Corporation (NYSE:FNV) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Franco-Nevada Corporation (NYSE:FNV). These stocks are Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), Gold Fields Limited (ADR) (NYSE:GFI), Compania de Minas Buenaventura SA (ADR) (NYSE:BVN), Agnico-Eagle Mines Limited (USA) (NYSE:AEM), and Eldorado Gold Corp (USA) (NYSE:EGO). This group of stocks belong to the gold industry and their market caps resemble FNV’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Randgold Resources Ltd. (ADR) (NASDAQ:GOLD)||12||0||0|
|Gold Fields Limited (ADR) (NYSE:GFI)||16||0||0|
|Compania de Minas Buenaventura SA (ADR) (NYSE:BVN)||6||0||0|
|Agnico-Eagle Mines Limited (USA) (NYSE:AEM)||20||0||0|
|Eldorado Gold Corp (USA) (NYSE:EGO)||17||0||0|
With the results demonstrated by our tactics, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Franco-Nevada Corporation (NYSE:FNV) is no exception.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.