Do Hedge Funds and Insiders Love Allied Nevada Gold Corp. (ANV)? – IAMGOLD Corporation (USA) (IAG), NovaGold Resources Inc. (USA) (NG)

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Allied Nevada Gold Corp. (NYSEAMEX:ANV) investors should be aware of a decrease in support from the world’s most elite money managers in recent months.

To most traders, hedge funds are viewed as slow, old financial vehicles of yesteryear. While there are greater than 8000 funds in operation today, we choose to focus on the aristocrats of this group, close to 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by tracking their highest performing picks, we have determined a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Chuck RoyceJust as beneficial, positive insider trading activity is a second way to parse down the investments you’re interested in. Just as you’d expect, there are lots of stimuli for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this tactic if “monkeys” know where to look (learn more here).

With these “truths” under our belt, we’re going to take a peek at the latest action encompassing Allied Nevada Gold Corp. (NYSEAMEX:ANV).

Hedge fund activity in Allied Nevada Gold Corp. (NYSEAMEX:ANV)

At the end of the fourth quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -8% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.

Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Allied Nevada Gold Corp. (NYSEAMEX:ANV), worth close to $179.9 million, accounting for 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Seth Klarman of Baupost Group, with a $86 million position; 2.8% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Richard Perry’s Perry Capital, John Paulson’s Paulson & Co and Eric Sprott’s Sprott Asset Management.

Judging by the fact that Allied Nevada Gold Corp. (NYSEAMEX:ANV) has faced declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few fund managers that elected to cut their entire stakes in Q4. At the top of the heap, Yale M. Fergang and Robert W. Medway’s Royal Capital dropped the largest position of all the hedgies we monitor, comprising close to $16.6 million in stock., and Charles Davidson of Wexford Capital was right behind this move, as the fund dropped about $5.4 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 1 funds in Q4.

Insider trading activity in Allied Nevada Gold Corp. (NYSEAMEX:ANV)

Bullish insider trading is at its handiest when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, Allied Nevada Gold Corp. (NYSEAMEX:ANV) has seen 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Allied Nevada Gold Corp. (NYSEAMEX:ANV). These stocks are IAMGOLD Corporation (USA) (NYSE:IAG), Las Vegas Sands Corp. (NYSE:SAND), NovaGold Resources Inc. (USA) (NYSEAMEX:NG), and AuRico Gold Inc (USA) (NYSE:AUQ). This group of stocks are the members of the gold industry and their market caps are similar to ANV’s market cap.

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