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Hedge Funds Are Selling New Gold Inc. (USA) (NGD)

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New Gold Inc. (USA) (NYSEAMEX:NGD) shareholders have witnessed a decrease in activity from the world’s largest hedge funds in recent months.

According to most stock holders, hedge funds are perceived as slow, old financial vehicles 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 aristocrats of this group, about 450 funds. It is widely believed that this group has its hands on the majority of the hedge fund industry’s total asset base, and by monitoring their highest performing equity investments, we have uncovered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped 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 24 percentage points in 7 months (see the details here).

Equally as beneficial, optimistic insider trading sentiment is a second way to break down the world of equities. Obviously, there are many motivations for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this method if “monkeys” know where to look (learn more here).

Now, let’s take a look at the key action encompassing New Gold Inc. (USA) (NYSEAMEX:NGD).

Hedge fund activity in New Gold Inc. (USA) (NYSEAMEX:NGD)

Heading into 2013, a total of 9 of the hedge funds we track held long positions in this stock, a change of -18% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.

According to our comprehensive database, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the biggest position in New Gold Inc. (USA) (NYSEAMEX:NGD). First Eagle Investment Management has a $62.4 million position in the stock, comprising 0.2% of its 13F portfolio. On First Eagle Investment Management’s heels is Bristol Investment Partners, managed by Trey Reik, which held a $12.1 million position; 7.9% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Steven Cohen’s SAC Capital Advisors, Michael Katz’s Glenrock Global Partners and D. E. Shaw’s D E Shaw.

New Gold Inc. (USA) (NYSEAMEX:NGD)Seeing as New Gold Inc. (USA) (NYSEAMEX:NGD) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there exists a select few money managers that slashed their entire stakes at the end of the year. Intriguingly, John Kleinheinz’s Kleinheinz Capital Partners cut the largest stake of the 450+ funds we track, valued at an estimated $6.8 million in stock.. Israel Englander’s fund, Millennium Management, also dumped its stock, about $0.2 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds at the end of the year.

Insider trading activity in New Gold Inc. (USA) (NYSEAMEX:NGD)

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time frame, New Gold Inc. (USA) (NYSEAMEX:NGD) has experienced zero unique insiders purchasing, 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 New Gold Inc. (USA) (NYSEAMEX:NGD). These stocks are Eldorado Gold Corp (USA) (NYSE:EGO), Harmony Gold Mining Co. (ADR) (NYSE:HMY), Franco-Nevada Corporation (NYSE:FNV), Gold Fields Limited (ADR) (NYSE:GFI), and Royal Gold, Inc USA) (NASDAQ:RGLD). This group of stocks belong to the gold industry and their market caps are closest to NGD’s market cap.

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