Harmony Gold Mining Co. (ADR) (NYSE:HMY) has seen a decrease in activity from the world’s largest hedge funds of late.
To most market participants, hedge funds are perceived as worthless, old investment vehicles of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the top tier of this group, about 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their highest performing picks, we have determined a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped 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).
Equally as important, bullish insider trading activity is another way to parse down the stock market universe. Obviously, there are a variety of reasons for an insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the impressive potential of this tactic if piggybackers understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the key action regarding Harmony Gold Mining Co. (ADR) (NYSE:HMY).
What does the smart money think about Harmony Gold Mining Co. (ADR) (NYSE:HMY)?
Heading into 2013, a total of 12 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly.
According to our comprehensive database, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the biggest position in Harmony Gold Mining Co. (ADR) (NYSE:HMY). First Eagle Investment Management has a $199 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $16 million position; 0% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Michael Katz’s Glenrock Global Partners, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Because Harmony Gold Mining Co. (ADR) (NYSE:HMY) has experienced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers who were dropping their full holdings in Q4. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest investment of the “upper crust” of funds we key on, valued at close to $5 million in stock., and David Costen Haley of HBK Investments 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 Harmony Gold Mining Co. (ADR) (NYSE:HMY)?
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past 180 days. Over the last six-month time frame, Harmony Gold Mining Co. (ADR) (NYSE:HMY) has seen 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 Harmony Gold Mining Co. (ADR) (NYSE:HMY). These stocks are Allied Nevada Gold Corp. (NYSEAMEX:ANV), AuRico Gold Inc (USA) (NYSE:AUQ), Royal Gold, Inc USA) (NASDAQ:RGLD), New Gold Inc. (USA) (NYSEAMEX:NGD), and IAMGOLD Corporation (USA) (NYSE:IAG). This group of stocks belong to the gold industry and their market caps resemble HMY’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Allied Nevada Gold Corp. (NYSEAMEX:ANV)||11||1||4|
|AuRico Gold Inc (USA) (NYSE:AUQ)||13||0||0|
|Royal Gold, Inc USA) (NASDAQ:RGLD)||26||1||4|
|New Gold Inc. (USA) (NYSEAMEX:NGD)||9||0||0|
|IAMGOLD Corporation (USA) (NYSE:IAG)||17||0||0|
With the results exhibited by the aforementioned studies, everyday investors should always monitor hedge fund and insider trading sentiment, and Harmony Gold Mining Co. (ADR) (NYSE:HMY) shareholders fit into this picture quite nicely.