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Is AngloGold Ashanti Limited (ADR) (NYSE:AU) Going to Burn These Hedge Funds?

AngloGold Ashanti Limited (ADR) (NYSE:AU) has experienced a decrease in enthusiasm from smart money lately.

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To the average investor, there are tons of metrics market participants can use to track their holdings. A duo of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can outclass their index-focused peers by a superb amount (see just how much).

Just as important, optimistic insider trading activity is another way to break down the financial markets. Just as you’d expect, there are many reasons for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this strategy if investors know where to look (learn more here).

Now, let’s take a glance at the latest action encompassing AngloGold Ashanti Limited (ADR) (NYSE:AU).

What does the smart money think about AngloGold Ashanti Limited (ADR) (NYSE:AU)?

In preparation for this year, a total of 23 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes substantially.

When looking at the hedgies we track, John Paulson’s Paulson & Co had the biggest position in AngloGold Ashanti Limited (ADR) (NYSE:AU), worth close to $885 million, accounting for 5.4% of its total 13F portfolio. Coming in second is Jean-Marie Eveillard of First Eagle Investment Management, with a $163 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Jim Simons’s Renaissance Technologies and Kerr Neilson’s Platinum Asset Management.

Since AngloGold Ashanti Limited (ADR) (NYSE:AU) has faced declining sentiment from the smart money, we can see that there were a few hedge funds that decided to sell off their full holdings at the end of the year. It’s worth mentioning that Peter Franklin Palmedo’s Sun Valley Gold dumped the largest position of the “upper crust” of funds we track, worth about $19 million in call options. Peter J. Eichler Jr.’s fund, Aletheia Research and Management, also dumped its stock, about $2 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading AngloGold Ashanti Limited (ADR) (NYSE:AU)?

Insider buying is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, AngloGold Ashanti Limited (ADR) (NYSE:AU) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s time-tested strategies, everyday investors must always watch hedge fund and insider trading activity, and AngloGold Ashanti Limited (ADR) (NYSE:AU) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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