Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Silver Wheaton Corp. (USA) (NYSE:SLW) changed recently.
Silver Wheaton Corp. (USA) (NYSE:SLW) investors should pay attention to a decrease in support from the world’s most elite money managers recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS), StanCorp Financial Group, Inc. (NYSE:SFG), and Seattle Genetics, Inc. (NASDAQ:SGEN) to gather more data points.
Follow Wheaton Precious Metals Corp. (NYSE:WPM)
Follow Wheaton Precious Metals Corp. (NYSE:WPM)
Now, we’re going to go over the new action surrounding Silver Wheaton Corp. (USA) (NYSE:SLW).
How are hedge funds trading Silver Wheaton Corp. (USA) (NYSE:SLW)?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Murray Stahl’s Horizon Asset Management has the largest position in Silver Wheaton Corp. (USA) (NYSE:SLW), worth close to $57.1 million, accounting for 1% of its total 13F portfolio. Sitting at the No. 2 spot is 3G Capital, managed by Jorge Paulo Lemann, which holds a $36 million position; 2.7% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions comprise Cliff Asness’ AQR Capital Management, Jacob Gottlieb’s Visium Asset Management and Jim Simons’ Renaissance Technologies.
Since Silver Wheaton Corp. (USA) (NYSE:SLW) has faced bearish sentiment from the smart money, logic holds that there lies a certain “tier” of hedgies that decided to sell off their full holdings heading into Q4. It’s worth mentioning that Michael Platt and William Reeves’s BlueCrest Capital Mgmt said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $13 million in stock, and John Burbank’s Passport Capital was right behind this move, as the fund dropped about $2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Silver Wheaton Corp. (USA) (NYSE:SLW). We will take a look at ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS), StanCorp Financial Group, Inc. (NYSE:SFG), Seattle Genetics, Inc. (NASDAQ:SGEN), and Cameco Corporation (USA) (NYSE:CCJ). This group of stocks’ market values resemble SLW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ISIS | 21 | 94251 | -5 |
| SFG | 23 | 438052 | 14 |
| SGEN | 21 | 2091919 | 5 |
| CCJ | 21 | 301345 | -5 |
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $731 million. That figure was $204 million in SLW’s case. StanCorp Financial Group, Inc. (NYSE:SFG) is the most popular stock in this table. On the other hand ISIS Pharmaceuticals, Inc. (NASDAQ:ISIS) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Silver Wheaton Corp. (USA) (NYSE:SLW) is as less popular as ISIS. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
