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Did Hedge Funds Drop The Ball On Coeur Mining, Inc. (CDE) ?

“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Coeur Mining, Inc. (NYSE:CDE) and see how it was affected.

Hedge fund interest in Coeur Mining, Inc. (NYSE:CDE) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CDE to other stocks including Third Point Reinsurance Ltd (NYSE:TPRE), Scorpio Tankers Inc. (NYSE:STNG), and Alamo Group, Inc. (NYSE:ALG) to get a better sense of its popularity.

In the financial world there are plenty of metrics stock market investors put to use to analyze their holdings. Some of the less utilized metrics are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the broader indices by a solid margin (see the details here).

CITADEL INVESTMENT GROUP

We’re going to take a look at the recent hedge fund action encompassing Coeur Mining, Inc. (NYSE:CDE).

How have hedgies been trading Coeur Mining, Inc. (NYSE:CDE)?

At the end of the fourth quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CDE over the last 14 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with CDE Positions

When looking at the institutional investors followed by Insider Monkey, D. E. Shaw’s D E Shaw has the number one position in Coeur Mining, Inc. (NYSE:CDE), worth close to $11.5 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $10.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism consist of Thomas E. Claugus’s GMT Capital, Ken Griffin’s Citadel Investment Group and Eric Sprott’s Sprott Asset Management.

Since Coeur Mining, Inc. (NYSE:CDE) has experienced a decline in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies that slashed their entire stakes last quarter. Intriguingly, Matthew Hulsizer’s PEAK6 Capital Management cut the biggest position of all the hedgies followed by Insider Monkey, valued at an estimated $0.3 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund dropped about $0.3 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Coeur Mining, Inc. (NYSE:CDE) but similarly valued. These stocks are Third Point Reinsurance Ltd (NYSE:TPRE), Scorpio Tankers Inc. (NYSE:STNG), Alamo Group, Inc. (NYSE:ALG), and TherapeuticsMD Inc (NASDAQ:TXMD). This group of stocks’ market values are similar to CDE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TPRE 18 52264 4
STNG 10 82830 -4
ALG 12 158978 -1
TXMD 10 49227 -4
Average 12.5 85825 -1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $44 million in CDE’s case. Third Point Reinsurance Ltd (NYSE:TPRE) is the most popular stock in this table. On the other hand Scorpio Tankers Inc. (NYSE:STNG) is the least popular one with only 10 bullish hedge fund positions. Coeur Mining, Inc. (NYSE:CDE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately CDE wasn’t nearly as popular as these 15 stock and hedge funds that were betting on CDE were disappointed as the stock returned -20.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

Disclosure: None. This article was originally published at Insider Monkey.

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