Is Goldcorp Inc. (USA) (NYSE:GG) an outstanding investment right now? Investors who are in the know are selling. The number of long hedge fund bets decreased by 8 lately.
If you’d ask most shareholders, hedge funds are viewed as slow, old investment tools of years past. While there are more than 8000 funds trading at present, we look at the elite of this group, close to 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by monitoring their best picks, we have unsheathed a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as key, bullish insider trading activity is another way to parse down the marketplace. As the old adage goes: there are a number of stimuli for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if investors understand where to look (learn more here).
With all of this in mind, it’s important to take a glance at the recent action regarding Goldcorp Inc. (USA) (NYSE:GG).
What have hedge funds been doing with Goldcorp Inc. (USA) (NYSE:GG)?
Heading into Q2, a total of 26 of the hedge funds we track were long in this stock, a change of -24% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Goldcorp Inc. (USA) (NYSE:GG). First Eagle Investment Management has a $619.4 million position in the stock, comprising 2.1% of its 13F portfolio. The second largest stake is held by Clint Carlson of Carlson Capital, with a $127.1 million position; 1.7% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Daniel Bubis’s Tetrem Capital Management.
Due to the fact that Goldcorp Inc. (USA) (NYSE:GG) has witnessed falling interest from the aggregate hedge fund industry, we can see that there was a specific group of hedgies that elected to cut their entire stakes heading into Q2. Interestingly, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors dropped the largest stake of the 450+ funds we watch, totaling an estimated $22.3 million in stock.. Jeffrey Vinik’s fund, Vinik Asset Management, also sold off its stock, about $19.1 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 8 funds heading into Q2.
How have insiders been trading Goldcorp Inc. (USA) (NYSE:GG)?
Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Goldcorp Inc. (USA) (NYSE:GG) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Goldcorp Inc. (USA) (NYSE:GG). These stocks are AngloGold Ashanti Limited (ADR) (NYSE:AU), Kinross Gold Corporation (USA) (NYSE:KGC), Yamana Gold Inc. (USA) (NYSE:AUY), Newmont Mining Corp (NYSE:NEM), and Barrick Gold Corporation (USA) (NYSE:ABX). This group of stocks are the members of the gold industry and their market caps are similar to GG’s market cap.