Is AngloGold Ashanti Limited (ADR) (AU) A Good Stock To Buy According To Hedge Funds?

Due to the fact that AngloGold Ashanti Limited (ADR) (NYSE:AU) has faced bearish sentiment from the smart money, we can see that there exists a select few fund managers that decided to sell off their entire stakes in the third quarter. Intriguingly, First Eagle Investment Management dropped the largest position of the 700 funds tracked by Insider Monkey, comprising close to $36.5 million in stock. Jacob Gottlieb’s now-closed fund, Visium Asset Management, also dumped its holdings, about $8.9 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 6 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AngloGold Ashanti Limited (ADR) (NYSE:AU) but similarly valued. These stocks are Helmerich & Payne, Inc. (NYSE:HP), Antero Resources Corp (NYSE:AR), Comerica Incorporated (NYSE:CMA), and Splunk Inc (NASDAQ:SPLK). This group of stocks’ market valuations resemble AU’s market valuation.

As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $828 million. That figure was $520 million in AU’s case. Comerica Incorporated (NYSE:CMA) is the most popular stock in this table. On the other hand Helmerich & Payne, Inc. (NYSE:HP) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks AngloGold Ashanti Limited (ADR) (NYSE:AU) is even less popular than HP. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. We believe higher interest rates will reduce the appetite for gold over the next 2-4 years and gold prices may even see sub-$1000 levels. Hedge funds may have similar views as they have been cutting back their gold related bets.

Disclosure: None