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Did Hedge Funds Make The Right Call On IAMGOLD Corporation (IAG) ?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at 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. 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 we look at how hedge funds traded IAMGOLD Corporation (NYSE:IAG) and determine whether the smart money was really smart about this stock.

IAMGOLD Corporation (NYSE:IAG) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of the first quarter of 2020. At the end of this article we will also compare IAG to other stocks including HNI Corp (NYSE:HNI), Tennant Company (NYSE:TNC), and Six Flags Entertainment Corp (NYSE:SIX) to get a better sense of its popularity.

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

According to most investors, hedge funds are assumed to be worthless, outdated financial vehicles of the past. While there are over 8000 funds with their doors open at the moment, Our researchers choose to focus on the masters of this group, approximately 850 funds. These investment experts command bulk of all hedge funds’ total asset base, and by tracking their inimitable equity investments, Insider Monkey has discovered a number of investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

RENAISSANCE TECHNOLOGIES

Jim Simons of Renaissance TechnologiesJim Simons

At Insider Monkey we scour multiple sources to uncover the next great investment idea. With Federal Reserve creating trillions of dollars out of thin air, we believe gold prices will keep increasing. So, we are checking out gold stocks like this small gold mining company. We go through lists like the 10 most profitable companies in America 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. Keeping this in mind let’s go over the latest hedge fund action regarding IAMGOLD Corporation (NYSE:IAG).

How are hedge funds trading IAMGOLD Corporation (NYSE:IAG)?

At Q1’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IAG over the last 18 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

Is IAG A Good Stock To Buy?

Among these funds, Renaissance Technologies held the most valuable stake in IAMGOLD Corporation (NYSE:IAG), which was worth $53.2 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $11.2 million worth of shares. Citadel Investment Group, Contrarius Investment Management, 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 Contrarius Investment Management allocated the biggest weight to IAMGOLD Corporation (NYSE:IAG), around 0.87% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, earmarking 0.61 percent of its 13F equity portfolio to IAG.

Seeing as IAMGOLD Corporation (NYSE:IAG) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers that slashed their full holdings heading into Q4. Intriguingly, Peter Franklin Palmedo’s Sun Valley Gold dropped the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth about $16.9 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also dropped its stock, about $0.3 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as IAMGOLD Corporation (NYSE:IAG) but similarly valued. These stocks are HNI Corp (NYSE:HNI), Tennant Company (NYSE:TNC), Six Flags Entertainment Corp (NYSE:SIX), and Asbury Automotive Group, Inc. (NYSE:ABG). This group of stocks’ market caps match IAG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HNI 15 47165 -5
TNC 11 89348 0
SIX 30 240206 -8
ABG 19 248518 -5
Average 18.75 156309 -4.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $107 million in IAG’s case. Six Flags Entertainment Corp (NYSE:SIX) is the most popular stock in this table. On the other hand Tennant Company (NYSE:TNC) is the least popular one with only 11 bullish hedge fund positions. IAMGOLD Corporation (NYSE:IAG) 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 IAG as the stock returned 120.2% 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.