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Goldcorp Inc. (USA) (NYSE:GG): Are Hedge Funds Right About This Stock?

Is Goldcorp Inc. (USA) (NYSE:GG) a buy, sell, or hold? The best stock pickers are becoming more confident. The number of bullish hedge fund positions inched up by 8 lately.

Goldcorp Production Guidance

If you’d ask most traders, hedge funds are seen as worthless, old financial tools of the past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the crème de la crème of this club, about 450 funds. It is estimated that this group controls the majority of all hedge funds’ total capital, and by watching their highest performing picks, we have identified a few investment strategies that have historically beaten Mr. Market. 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Equally as important, positive insider trading activity is a second way to break down the financial markets. There are plenty of reasons for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this method if investors understand where to look (learn more here).

With all of this in mind, let’s take a look at the recent action regarding Goldcorp Inc. (USA) (NYSE:GG).

What does the smart money think about Goldcorp Inc. (USA) (NYSE:GG)?

At the end of the fourth quarter, a total of 29 of the hedge funds we track were long in this stock, a change of 38% from the third quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Jean-Marie Eveillard’s First Eagle Investment Management had the biggest position in Goldcorp Inc. (USA) (NYSE:GG), worth close to $409 million, comprising 1.5% of its total 13F portfolio. The second largest stake is held by Carlson Capital, managed by Clint Carlson, which held a $83 million position; 1.4% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Daniel Bubis’s Tetrem Capital Management and Israel Englander’s Millennium Management.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Carlson Capital, managed by Clint Carlson, established the most outsized position in Goldcorp Inc. (USA) (NYSE:GG). Carlson Capital had 83 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $74 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Franklin Palmedo’s Sun Valley Gold, Trey Reik’s Bristol Investment Partners, and Ray Dalio’s Bridgewater Associates.

How have insiders been trading Goldcorp Inc. (USA) (NYSE:GG)?

Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time frame, Goldcorp Inc. (USA) (NYSE:GG) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the returns exhibited by our studies, retail investors should always keep an eye on hedge fund and insider trading activity, and Goldcorp Inc. (USA) (NYSE:GG) is no exception.

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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