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Is New Gold Inc. (USA) (NGD) Going to Burn These Hedge Funds?

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New Gold Inc. (USA) (NYSEAMEX:NGD) investors: listen up.

In today’s marketplace, there are plenty of gauges market participants can use to track Mr. Market. Two of the most useful 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 investment managers can outperform their index-focused peers by a superb margin (see just how much).

New Gold Inc. (USA) (NYSEAMEX:NGD)

Equally as crucial, bullish insider trading activity is another way to look at the investments you’re interested in. Just as you’d expect, there are a variety of reasons for an executive to get rid of shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).

Keeping this in mind, we’re going to discuss the newest info about New Gold Inc. (USA) (NYSEAMEX:NGD).

What does the smart money think about New Gold Inc. (USA) (NYSEAMEX:NGD)?

At Q2’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of -13% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially.

When using filings from the hedgies we track, Matt McLennan’s First Eagle Investment Management had the largest position in New Gold Inc. (USA) (NYSEAMEX:NGD), worth close to $34.9 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $8.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Trey Reik’s Bristol Investment Partners, Steven Cohen’s SAC Capital Advisors and Matthew Hulsizer’s PEAK6 Capital Management.

Because New Gold Inc. (USA) (NYSEAMEX:NGD) has faced declining interest from the smart money’s best and brightest, it’s easy to see that there were a few hedge funds that decided to sell off their full holdings at the end of the second quarter. At the top of the heap, Jorge Paulo Lemann’s 3G Capital dumped the largest position of all the hedgies we watch, worth about $3.6 million in stock, and John Thiessen of Vertex One Asset Management was right behind this move, as the fund sold off about $1.8 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds at the end of the second quarter.

How are insiders trading New Gold Inc. (USA) (NYSEAMEX:NGD)?

Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, New Gold Inc. (USA) (NYSEAMEX:NGD) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to New Gold Inc. (USA) (NYSEAMEX:NGD). These stocks are Eldorado Gold Corp (USA) (NYSE:EGO), Harmony Gold Mining Co. (ADR) (NYSE:HMY), Franco-Nevada Corporation (NYSE:FNV), Gold Fields Limited (ADR) (NYSE:GFI), and Royal Gold, Inc USA) (NASDAQ:RGLD). This group of stocks belong to the gold industry and their market caps are similar to NGD’s market cap.

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