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Here is What Hedge Funds Think About Newmont Mining Corp (NEM)

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Newmont Mining Corp (NYSE:NEM) was in 37 hedge funds’ portfolio at the end of the first quarter of 2013. NEM has experienced a decrease in support from the world’s most elite money managers lately. There were 44 hedge funds in our database with NEM positions at the end of the previous quarter.

To most stock holders, hedge funds are seen as unimportant, outdated investment tools of yesteryear. While there are over 8000 funds in operation today, we look at the upper echelon of this club, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total asset base, and by keeping an eye on their best stock picks, we have figured out a number of investment strategies that have historically beaten the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as beneficial, positive insider trading sentiment is another way to parse down the investments you’re interested in. Just as you’d expect, there are plenty of incentives for an executive to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this strategy if piggybackers understand where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the latest action surrounding Newmont Mining Corp (NYSE:NEM).

How have hedgies been trading Newmont Mining Corp (NYSE:NEM)?

At the end of the first quarter, a total of 37 of the hedge funds we track were long in this stock, a change of -16% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly.

Newmont Mining Corp (NYSE:NEM)When looking at the hedgies we track, Jean-Marie Eveillard’s First Eagle Investment Management had the most valuable position in Newmont Mining Corp (NYSE:NEM), worth close to $252.3 million, accounting for 0.8% of its total 13F portfolio. On First Eagle Investment Management’s heels is Mario Gabelli of GAMCO Investors, with a $89 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include D. E. Shaw’s D E Shaw, Gilchrist Berg’s Water Street Capital and Martin Whitman’s Third Avenue Management.

Due to the fact that Newmont Mining Corp (NYSE:NEM) has faced bearish sentiment from hedge fund managers, logic holds that there was a specific group of money managers who sold off their full holdings in Q1. Interestingly, Robert Pitts’s Steadfast Capital Management dropped the largest position of the 450+ funds we monitor, valued at an estimated $59.8 million in call options. Robert Pitts’s fund, Steadfast Capital Management, also dumped its call options., about $29.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 7 funds in Q1.

Insider trading activity in Newmont Mining Corp (NYSE:NEM)

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time period, Newmont Mining Corp (NYSE:NEM) has seen 1 unique insiders purchasing, and 11 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Newmont Mining Corp (NYSE:NEM). These stocks are AngloGold Ashanti Limited (ADR) (NYSE:AU), Kinross Gold Corporation (USA) (NYSE:KGC), Yamana Gold Inc. (USA) (NYSE:AUY), Barrick Gold Corporation (USA) (NYSE:ABX), and Goldcorp Inc. (USA) (NYSE:GG). All of these stocks are in the gold industry and their market caps resemble NEM’s market cap.

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