Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Hedge fund interest in Richmont Mines Inc. (USA) (NYSEMKT:RIC) shares was flat during the third quarter. This is usually a negative indicator. 9 hedge funds that we track owned the stock on September 30, same as on June 30. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cass Information Systems (NASDAQ:CASS), Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), and EPIQ Systems, Inc. (NASDAQ:EPIQ) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How are hedge funds trading Richmont Mines Inc. (USA) (NYSEMKT:RIC)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the previous quarter. By comparison, just 3 hedge funds held shares or bullish call options in RIC heading into this year, so hedge fund ownership has tripled in 2016. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, one of the biggest hedge funds in the world, has the biggest position in Richmont Mines Inc. (USA) (NYSEMKT:RIC), worth close to $35.9 million. The second most bullish fund manager is Sprott Asset Management, led by Eric Sprott, which holds a $21.8 million position. Remaining members of the smart money with similar optimism consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Chuck Royce’s Royce & Associates, and Cliff Asness’ AQR Capital Management. We should note that Sprott Asset Management is among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.