In this article, we discuss 8 stocks to sell now according to Mitch Cantor’s Mountain Lake Investment Management.
California-based hedge fund Mountain Lake Investment Management was founded in 2001 by Mitchell E. Cantor. Mr. Cantor holds a bachelor’s degree from Brown University and an MBA from the University of Pennsylvania’s Wharton School and previously served as a research analyst at Sanford C. Bernstein & Co. and as a portfolio manager and co-chief investment officer at Goldman Sachs Asset Management (GSAM). He founded and managed the five-star value-style Growth & Income Fund at GSAM. He later became the Chief Executive Officer of Weiss, Peck & Greer, a $13 billion money management business.
Mountain Lake’s Q4 portfolio investments are concentrated in the consumer staples, energy, finance, information technology, materials, real estate, utilities and communications and transport sectors. The hedge fund had a total of $209.27 million in managed 13F securities at the end of the fourth quarter of 2021. The hedge fund’s top 10 stocks comprise 77.66% of its total 13F holdings. In Q4 2021, Mountain Lake Investment Management purchased 3 new stocks, made an additional purchase in 7 stocks, reduced its holdings in 11 equities, and sold out of 8 securities. Some of the stocks that Mitch Cantor is bearish on include Cameco Corporation (NYSE:CCJ), Barrick Gold Corporation (NYSE:GOLD), and Newmont Corporation (NYSE:NEM).
In the third quarter of 2021, Mountain Lake Investment Management held 65,000 shares in Cameco Corporation (NYSE:CCJ), valued at $1.41 million, which the hedge fund sold in the fourth quarter of 2021. On April 13, Scotiabank analyst Orest Wowkodaw maintained an ‘Outperform’ rating on Cameco Corporation (NYSE:CCJ), raising his price objective on it to CAD47 ($37.23) from CAD40 ($31.68).
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In the fourth quarter, Mountain Lake Investment Management sold 20,000 shares of Barrick Gold Corporation (NYSE:GOLD), reducing its previous stake by about 7%. Barrick Gold Corporation (NYSE:GOLD) shares have gained about 13.36% over the last 12 months as of April 16.
On March 9, Jefferies analyst Christopher LaFemina boosted his price target on Newmont Corporation (NYSE:NEM) to $72 from $67 and reiterated a ‘Hold’ rating on the shares. However, in the fourth quarter, Mitch Cantor reduced his stake in Newmont Corporation (NYSE:NEM) by 13%, with his stake in the company being worth about $6.22 million as of December 31.
Our Methodology
With this context in mind, here is our list of the 8 stocks to sell now according to Mitch Cantor’s Mountain Lake Investment. We picked these stocks based on the Q4 SEC filing made by Cantor’s hedge fund, which revealed the fund’s latest positions. In the fourth quarter, the fund sold all of its holdings in the following firms. Insider Monkey’s database of 924 hedge funds that filed 13Fs for the fourth quarter of 2021 provide all of the hedge fund data.
Stocks to Sell Now According to Mitch Cantor’s Mountain Lake Investment
8. Vista Outdoor Inc. (NYSE:VSTO)
Number of Hedge Fund Holders: 25
Percentage Decrease in Stake in Q4: 100%
Vista Outdoor Inc. (NYSE:VSTO) is a consumer goods company that designs, manufactures, and markets outdoor sports and entertainment equipment. Mitch Cantor’s Mountain Lake Investment held 121,000 shares in Vista Outdoor Inc. (NYSE:VSTO) in the third quarter, valued at $4.88 million, which the hedge fund sold in the fourth quarter.
On February 4, Roth Capital analyst Matt Koranda maintained a ‘Buy’ rating on Vista Outdoor Inc. (NYSE:VSTO) while reducing his price objective on the company’s shares to $57 from $61. Despite signals that a peak is approaching, the analyst’s thesis remains unaltered as he expects Vista Outdoor Inc. (NYSE:VSTO) to profit from a continuing ammo up-cycle over the following three quarters.
Vista Outdoor Inc. (NYSE:VSTO) is also attracting the attention of other prominent hedge fund managers. At the end of the fourth quarter of 2021, 25 hedge funds tracked by the database of Insider Monkey held stakes worth $460.48 million in Vista Outdoor Inc. (NYSE:VSTO), up from 23 funds owning stakes worth $407.07 million a quarter earlier.
Just like Cameco Corporation (NYSE:CCJ), Barrick Gold Corporation (NYSE:GOLD), and Newmont Corporation (NYSE:NEM), Vista Outdoor Inc. (NYSE:VSTO) is one of the stocks to sell now according to Mitch Cantor’s Mountain Lake Investment.
ClearBridge Investments, in its Q2 2021 investor letter, highlighted a few stocks, and Vista Outdoor Inc. (NYSE:VSTO) was one of them. Here is what the fund said:
“Our Strategy outperformed with strong results from consumer discretionary stocks like Vista Outdoor Inc. (NYSE:VSTO). Vista Outdoor Inc. (NYSE:VSTO), a manufacturer of a wide range of products serving the outdoor sports and recreation markets, also performed well in the period on continued demand and growing margins.”
7. Sandstorm Gold Ltd. (NYSE:SAND)
Number of Hedge Fund Holders: 14
Percentage Decrease in Stake in Q4: 100%
Sandstorm Gold Ltd. (NYSE:SAND) is a company that buys gold and other metals purchase agreements and royalties. Sandstorm Gold Ltd. (NYSE:SAND) has 230 streams and royalties in its portfolio. Sandstorm Gold Ltd. (NYSE:SAND)’s price objective was lifted to CAD11.50 ($9.11) from CAD11 ($8.71) on February 22 by TD Securities analyst Derick Ma, who kept a ‘Buy’ rating on the stock.
On April 1, Sandstorm Gold Ltd. (NYSE:SAND) declared a quarterly dividend of CAD0.02 per share, in line with the previous. Sandstorm Gold Ltd. (NYSE:SAND) said on April 4 that it had sold 18,700 attributable gold equiv. oz. in the first quarter of 2022, generating $35.3 million in early sales.
Mitch Cantor cut his stake in Sandstorm Gold Ltd. (NYSE:SAND) by 32% in the third quarter. He first invested in Sandstorm Gold Ltd. (NYSE:SAND) in the first quarter of 2021. However, Mitch Cantor’s Mountain Lake Investment sold off its entire stake in the company during the fourth quarter of 2021.
14 hedge funds had stakes in Sandstorm Gold Ltd. (NYSE:SAND) at the end of the fourth quarter of 2021, down from 15 at the end of Q3. Those stakes were valued at $106.27 million on December 31.
6. Osisko Gold Royalties Ltd (NYSE:OR)
Number of Hedge Fund Holders: 17
Percentage Decrease in Stake in Q4: 100%
Osisko Gold Royalties Ltd (NYSE:OR) is a precious metal, streams, and other royalties acquisition, mining, and exploration company. A 5% net smelter return royalty on the Canadian Malartic mine is Osisko Gold Royalties Ltd (NYSE:OR)’s most valuable asset. It is also involved in mining project exploration, appraisal, and development.
On April 6, TD Securities analyst Greg Barnes maintained a ‘Buy’ recommendation on Osisko Gold Royalties Ltd (NYSE:OR), raising his price objective on the stock to CAD23 ($18.22) from CAD21 ($16.63). Millennium Management, with approximately 5.86 million OR shares worth $71.84 million, is the largest shareholder of Osisko Gold Royalties Ltd (NYSE:OR) in our database as of Q4.
Osisko Gold Royalties Ltd (NYSE:OR) saw a decrease in hedge fund sentiment during Q4, as the number of long hedge fund positions declined to 17 by the end of the fourth quarter, compared to 19 positions in the previous quarter. Mountain Lake Investment was also bearish on Osisko Gold Royalties Ltd (NYSE:OR), and it was one of the stocks that Mitch Cantor’s Mountain Lake Investment sold off during the fourth quarter of 2021.
5. Martin Marietta Materials, Inc. (NYSE:MLM)
Number of Hedge Fund Holders: 39
Percentage Decrease in Stake in Q4: 100%
Martin Marietta Materials, Inc. (NYSE:MLM) operates a network of quarries and distribution yards where crushed stone, sand, and gravel are produced. DA Davidson’s Brent Thielman cut his price target on Martin Marietta Materials, Inc. (NYSE:MLM) to $450 from $465 on February 14, citing industry and peer multiple contractions, but reaffirmed a ‘Buy’ recommendation.
39 hedge funds in our database held stakes in Martin Marietta Materials, Inc. (NYSE:MLM) at the end of the fourth quarter, compared to 42 funds in the third quarter. Select Equity Group is Martin Marietta Materials, Inc. (NYSE:MLM)’s most significant stakeholder, with 3.51 million shares worth $1.54 billion.
Mountain Lake Investment started building its position in Martin Marietta Materials, Inc. (NYSE:MLM) in the first quarter of 2020, and in the fourth quarter of 2021, the hedge fund sold off its 5,000 shares of the company, which were valued at $1.71 million on September 30.
In addition to Cameco Corporation (NYSE:CCJ), Barrick Gold Corporation (NYSE:GOLD), and Newmont Corporation (NYSE:NEM), Martin Marietta Materials, Inc. (NYSE:MLM) is one of the stocks to sell now according to Mitch Cantor’s Mountain Lake Investment.
In its fourth quarter 2021 investor letter, Weitz Investment Management mentioned Martin Marietta Materials, Inc. (NYSE:MLM). Here is what the fund said:
“Martin Marietta Materials is one of the Fund’s largest quarterly contributors due to solid results and bright outlooks for their prosaic, essential products. Aggregate volumes and backlogs are strong across end markets, pricing momentum is robust, and the federal infrastructure bill adds visibility into the amount of money that will be allocated to infrastructure projects.”
4. EMX Royalty Corporation (NYSE:EMX)
Number of Hedge Fund Holders: 3
Percentage Decrease in Stake in Q4: 100%
EMX Royalty Corporation (NYSE:EMX) and its subsidiaries are involved in the exploration of metals and minerals properties and the generation of royalties from them. Among the hedge funds being tracked by Insider Monkey, Toronto-based investment firm Sprott Asset Management is a leading shareholder of EMX Royalty Corporation (NYSE:EMX), owning 4.01 million shares worth more than $9.08 million as of December 31.
Mountain Lake Investment had no position in Martin Marietta Materials, Inc. (NYSE:MLM) in the fourth quarter after it sold off its 234,100 shares in EMX Royalty Corporation (NYSE:EMX) during Q4, which were worth $599,000 on September 30, thus adding it to the list of stocks to sell according to Mitch Cantor’s Mountain Lake Investment. The hedge fund first bought a stake in EMX Royalty Corporation (NYSE:EMX) in the first quarter of 2021.
Founded in 1996, EMX Royalty Corporation (NYSE:EMX) has attracted investments from just 3 of the hedge funds tracked by our database, with their positions valued at $9.33 million at the end of Q4, down from 4 hedge funds with $9.16 million in holdings a quarter earlier.
3. Cameco Corporation (NYSE:CCJ)
Number of Hedge Fund Holders: 37
Percentage Decrease in Stake in Q4: 100%
Cameco Corporation (NYSE:CCJ) is a company that sells uranium, with Uranium and Fuel Services being its two primary segments in which it works. At the end of the fourth quarter of 2021, 37 hedge funds tracked by the database of Insider Monkey held stakes worth $780.13 million in Cameco Corporation (NYSE:CCJ), up from 35 funds in the preceding quarter, which held positions worth $755.74 million.
However, in the fourth quarter of 2021, Mitch Cantor’s Mountain Lake Investment sold its 65,000 shares in Cameco Corporation (NYSE:CCJ), which were valued at $1.41 million at the end of Q3.
Kopernik Global Investors is the largest shareholder of Cameco Corporation (NYSE:CCJ), with a stake valued at $195.86 million as of the end of the fourth quarter of 2021. Following Kopernik Global Investors, MFN Partners came in second with a $121.68 million investment.
2. Antero Midstream Corporation (NYSE:AM)
Number of Hedge Fund Holders: 16
Percentage Decrease in Stake in Q4: 100%
Antero Midstream Corporation (NYSE:AM) is a midstream energy company that owns, manages, and develops assets to support Antero Resources’ production and completion activities. On April 13, Antero Midstream Corporation (NYSE:AM) declared a quarterly dividend of $0.225 per share, in line with the previous.
Antero Midstream Corporation (NYSE:AM) was downgraded from ‘Equal-Weight’ to ‘Underweight’ by Barclays analyst Marc Solecitto on March 2, with a price objective of $10, down from $11. The analyst expected little upside potential in 2022, with the company in maintenance mode and rapid investment returns unlikely until 2024.
During the fourth quarter of 2021, Mitch Cantor sold off his stake in Antero Midstream Corporation (NYSE:AM), which had featured in the fund’s portfolio since the first quarter of 2019. Mitch Cantor had been selling the stock since the third quarter of 2020.
Overall, hedge funds are loading up on Antero Midstream Corporation (NYSE:AM), as 16 of the funds tracked by Insider Monkey held stakes in Antero Midstream Corporation (NYSE:AM) at the end of Q4, up from 14 funds a quarter earlier. Richard Schimel and Lawrence Sapanski’s Cinctive Capital Management is the most significant stakeholder of Antero Midstream Corporation (NYSE:AM) among that group, with 3.13 million shares valued at $30.28 million.
Bonhoeffer Capital Management, an asset management firm, highlighted a few stocks in its Q4 2020 investor letter, and Antero Midstream Corporation (NYSE:AM) was one of them. Here is what the fund said:
“Public LBOs (32% of Portfolio; Quarterly Average Performance +25%)
This includes our broadcast
TV franchises, leasing and roll-on/roll-off (RORO) shipping, and our natural gas pipeline firm. One trend in these levered firms is the increasing spread between bond yields and the firms’ free cash flow yield.
An example is Antero Midstream Corporation (NYSE:AM), whose FCF yield was 15% as of December 31, 2020, with a debt yield of 6% with the bond/equity FCF spread of 9%. This is a large spread given that Antero Midstream Corporation (NYSE:AM) has completed its backbone infrastructure and gathering investment and capital expenditures should be small going forward. With natural gas prices rebounding, Antero Midstream Corporation (NYSE:AM) cash flows become more secured as Antero Midstream Corporation (NYSE:AM) has more cash flow cushion in making payments to Antero Midstream. The recovery in natural gas prices is expected to continue as the economy opens up and low oil prices have shut down Permian oil wells that were generating almost-free associated natural gas. Antero Midstream’s FCF yield of 15% is also higher than similarly secured Antero Midstream Corporation (NYSE:AM) subordinated debt with a yield of 7.8%.”
1. Alliance Resource Partners, L.P. (NASDAQ:ARLP)
Number of Hedge Fund Holders: 5
Percentage Decrease in Stake in Q4: 100%
Alliance Resource Partners, L.P. (NASDAQ:ARLP) is a natural resource firm that produces and sells coal to utilities and industrial customers in the United States. Alliance Resource Partners, L.P. (NASDAQ:ARLP)’s segments include Illinois Basin, Appalachia, Minerals, and Other & Corporate.
An ‘Outperform’ rating was assigned to Alliance Resource Partners, L.P. (NASDAQ:ARLP), along with a $22 price objective by Noble Capital analyst Mark Reichman on March 30. Mountain Lake Investment Management sold all of its 229,500 Alliance Resource Partners, L.P. (NASDAQ:ARLP) shares in the fourth quarter of 2021.
Alliance Resource Partners, L.P. (NASDAQ:ARLP) was in 5 hedge funds’ portfolios at the end of the fourth quarter of 2021, down from 6 in the preceding quarter. Magnolia Capital Fund is Alliance Resource Partners, L.P. (NASDAQ:ARLP)’s largest shareholder, holding shares valued at $62.5 million as of December 31.
For some compelling buying opportunities, be sure to check out 10 Tech Stocks to Buy Now According to Robert Pitts’ Steadfast Capitals and 8 Best Energy Stocks to Buy According to Stuart Zimmer’s Hedge Fund
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Disclosure: None. 8 Stocks to Sell Now According to Mitch Cantor’s Mountain Lake Investment Management is originally published on Insider Monkey.
