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Should You Avoid Kinross Gold Corporation (USA) (KGC)?

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Kinross Gold Corporation (USA) (NYSE:KGC) was in 27 hedge funds’ portfolio at the end of March. KGC has seen a decrease in hedge fund interest recently. There were 29 hedge funds in our database with KGC positions at the end of the previous quarter.

In the eyes of most stock holders, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are over 8000 funds with their doors open at present, we hone in on the moguls of this group, about 450 funds. It is widely believed that this group controls most of the hedge fund industry’s total capital, and by monitoring their highest performing investments, we have come up with a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Kinross Gold Corporation (USA) (NYSE:KGC)

Just as key, bullish insider trading sentiment is another way to parse down the investments you’re interested in. There are plenty of stimuli for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).

Now, let’s take a glance at the recent action surrounding Kinross Gold Corporation (USA) (NYSE:KGC).

How are hedge funds trading Kinross Gold Corporation (USA) (NYSE:KGC)?

At the end of the first quarter, a total of 27 of the hedge funds we track held long positions in this stock, a change of -7% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Jean-Marie Eveillard’s First Eagle Investment Management had the biggest position in Kinross Gold Corporation (USA) (NYSE:KGC), worth close to $100.5 million, comprising 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is John Burbank of Passport Capital, with a $96.9 million position; 3.8% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include Jeffrey Vinik’s Vinik Asset Management, Peter Franklin Palmedo’s Sun Valley Gold and Martin Whitman’s Third Avenue Management.

Because Kinross Gold Corporation (USA) (NYSE:KGC) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedgies that decided to sell off their positions entirely last quarter. At the top of the heap, Steven Cohen’s SAC Capital Advisors dropped the largest investment of the “upper crust” of funds we watch, totaling close to $6.7 million in stock., and Malcolm Fairbairn of Ascend Capital was right behind this move, as the fund dumped about $5.8 million worth. These moves are interesting, as aggregate hedge fund interest fell by 2 funds last quarter.

Insider trading activity in Kinross Gold Corporation (USA) (NYSE:KGC)

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has seen transactions within the past six months. Over the latest 180-day time frame, Kinross Gold Corporation (USA) (NYSE:KGC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Kinross Gold Corporation (USA) (NYSE:KGC). These stocks are Agnico-Eagle Mines Limited (USA) (NYSE:AEM), Yamana Gold Inc. (USA) (NYSE:AUY), Compania de Minas Buenaventura SA (ADR) (NYSE:BVN), Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), and AngloGold Ashanti Limited (ADR) (NYSE:AU). This group of stocks belong to the gold industry and their market caps are similar to KGC’s market cap.

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