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Is Coeur d’Alene Mines Corporation (NYSE:CDE) Going to Burn These Hedge Funds? – Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), First Majestic Silver Corp (NYSE:AG)

Coeur d’Alene Mines Corporation (NYSE:CDE) was in 13 hedge funds’ portfolio at the end of December. CDE has seen a decrease in enthusiasm from smart money recently. There were 18 hedge funds in our database with CDE positions at the end of the previous quarter.

Coeur d'Alene Mines Corporation (NYSE:CDE)

According to most traders, hedge funds are perceived as worthless, old investment tools of years past. While there are greater than 8000 funds trading at present, we at Insider Monkey look at the top tier of this club, close to 450 funds. It is widely believed that this group oversees the majority of the smart money’s total asset base, and by keeping an eye on their highest performing equity investments, we have deciphered a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).

Equally as key, positive insider trading activity is a second way to break down the investments you’re interested in. Obviously, there are a number of motivations for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this tactic if investors understand where to look (learn more here).

With all of this in mind, we’re going to take a look at the latest action encompassing Coeur d’Alene Mines Corporation (NYSE:CDE).

What does the smart money think about Coeur d’Alene Mines Corporation (NYSE:CDE)?

In preparation for this year, a total of 13 of the hedge funds we track held long positions in this stock, a change of -28% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly.

According to our comprehensive database, Sun Valley Gold, managed by Peter Franklin Palmedo, holds the largest position in Coeur d’Alene Mines Corporation (NYSE:CDE). Sun Valley Gold has a $31 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Dreman Value Management, managed by David Dreman, which held a $31 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Eric Sprott’s Sprott Asset Management, Clint Carlson’s Carlson Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Judging by the fact that Coeur d’Alene Mines Corporation (NYSE:CDE) has faced bearish sentiment from the smart money, logic holds that there was a specific group of fund managers who were dropping their entire stakes heading into 2013. Interestingly, Thomas E. Claugus’s GMT Capital sold off the biggest stake of all the hedgies we track, comprising about $21 million in stock.. Donald Chiboucis’s fund, Columbus Circle Investors, also sold off its stock, about $20 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds heading into 2013.

How are insiders trading Coeur d’Alene Mines Corporation (NYSE:CDE)?

Insider purchases made by high-level executives is at its handiest when the company in focus has seen transactions within the past six months. Over the last 180-day time period, Coeur d’Alene Mines Corporation (NYSE:CDE) has seen 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Coeur d’Alene Mines Corporation (NYSE:CDE). These stocks are Silvercorp Metals Inc. (USA) (NYSE:SVM), Silver Standard Resources Inc. (USA) (NASDAQ:SSRI), Hecla Mining Company (NYSE:HL), Pan American Silver Corp. (USA) (NASDAQ:PAAS), and First Majestic Silver Corp (NYSE:AG). This group of stocks belong to the silver industry and their market caps match CDE’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Silvercorp Metals Inc. (USA) (NYSE:SVM) 5 0 0
Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) 7 0 0
Hecla Mining Company (NYSE:HL) 6 0 0
Pan American Silver Corp. (USA) (NASDAQ:PAAS) 15 0 0
First Majestic Silver Corp (NYSE:AG) 5 0 0

With the results exhibited by the aforementioned studies, retail investors should always monitor hedge fund and insider trading sentiment, and Coeur d’Alene Mines Corporation (NYSE:CDE) applies perfectly to this mantra.

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Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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