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Did Hedge Funds Make The Right Call On B2Gold Corp (BTG) ?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtB2Gold Corp (NYSE:BTG) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

Is B2Gold Corp (NYSE:BTG) a healthy stock for your portfolio? The smart money was taking a bullish view. The number of bullish hedge fund positions went up by 2 in recent months. Our calculations also showed that BTG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). BTG was in 19 hedge funds’ portfolios at the end of March. There were 17 hedge funds in our database with BTG positions at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. With all of this in mind let’s go over the recent hedge fund action surrounding B2Gold Corp (NYSE:BTG).

How have hedgies been trading B2Gold Corp (NYSE:BTG)?

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BTG over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is BTG A Good Stock To Buy?

More specifically, Renaissance Technologies was the largest shareholder of B2Gold Corp (NYSE:BTG), with a stake worth $135 million reported as of the end of September. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $32.1 million. Two Sigma Advisors, Sun Valley Gold, and Sprott Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Prince Street Capital Management allocated the biggest weight to B2Gold Corp (NYSE:BTG), around 1.1% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, earmarking 1 percent of its 13F equity portfolio to BTG.

Now, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most outsized position in B2Gold Corp (NYSE:BTG). Marshall Wace LLP had $0.5 million invested in the company at the end of the quarter. Ronald Hua’s Qtron Investments also initiated a $0.1 million position during the quarter. The other funds with brand new BTG positions are Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s check out hedge fund activity in other stocks similar to B2Gold Corp (NYSE:BTG). We will take a look at Nektar Therapeutics (NASDAQ:NKTR), Balchem Corporation (NASDAQ:BCPC), Sibanye Stillwater Limited (NYSE:SBSW), and Blueprint Medicines Corporation (NASDAQ:BPMC). This group of stocks’ market valuations are similar to BTG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NKTR 17 198202 -9
BCPC 13 56015 1
SBSW 19 83948 6
BPMC 36 762086 -1
Average 21.25 275063 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $275 million. That figure was $229 million in BTG’s case. Blueprint Medicines Corporation (NASDAQ:BPMC) is the most popular stock in this table. On the other hand Balchem Corporation (NASDAQ:BCPC) is the least popular one with only 13 bullish hedge fund positions. B2Gold Corp (NYSE:BTG) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 18.6% in 2020 through July 27th and still beat the market by 17.1 percentage points. A small number of hedge funds were also right about betting on BTG as the stock returned 124.4% since the end of March and outperformed the market by an even larger margin.

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