The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Sibanye Gold Ltd (NYSE:SBGL).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We’re going to check out the fresh hedge fund action encompassing Sibanye Gold Ltd (NYSE:SBGL).
What have hedge funds been doing with Sibanye Gold Ltd (NYSE:SBGL)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2018. On the other hand, there were a total of 8 hedge funds with a bullish position in SBGL at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Sibanye Gold Ltd (NYSE:SBGL), with a stake worth $5.9 million reported as of the end of September. Trailing Millennium Management was Renaissance Technologies, which amassed a stake valued at $0.8 million. GLG Partners, BlueCrest Capital Mgmt., and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, created the most valuable position in Sibanye Gold Ltd (NYSE:SBGL). Renaissance Technologies had $0.8 million invested in the company at the end of the quarter. Eric Sprott’s Sprott Asset Management also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Paul Tudor Jones’s Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks similar to Sibanye Gold Ltd (NYSE:SBGL). We will take a look at Unit Corporation (NYSE:UNT), Asbury Automotive Group, Inc. (NYSE:ABG), Cheetah Mobile Inc (NYSE:CMCM), and Loral Space & Communications Inc. (NASDAQ:LORL). This group of stocks’ market caps are similar to SBGL’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $235 million. That figure was $9 million in SBGL’s case. Loral Space & Communications Inc. (NASDAQ:LORL) is the most popular stock in this table. On the other hand Cheetah Mobile Inc (NYSE:CMCM) is the least popular one with only 7 bullish hedge fund positions. Sibanye Gold Ltd (NYSE:SBGL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LORL might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.