Do Hedge Funds Love Western Copper and Gold Corporation (WRN)?

After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Western Copper and Gold Corporation (NYSE:WRN).

Western Copper and Gold Corporation (NYSE:WRN) has experienced an increase in enthusiasm from smart money of late. Western Copper and Gold Corporation (NYSE:WRN) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. There were 2 hedge funds in our database with WRN positions at the end of the second quarter. Our calculations also showed that WRN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

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

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Eric Sprott Sprott Asset Management

Eric Sprott of Sprott Asset Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world 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. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to take a gander at the fresh hedge fund action encompassing Western Copper and Gold Corporation (NYSE:WRN).

What does smart money think about Western Copper and Gold Corporation (NYSE:WRN)?

At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in WRN a year ago. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

The largest stake in Western Copper and Gold Corporation (NYSE:WRN) was held by Sprott Asset Management, which reported holding $1.5 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $0.8 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.

As one would reasonably expect, key money managers have been driving this bullishness. Sprott Asset Management, managed by Eric Sprott, initiated the largest position in Western Copper and Gold Corporation (NYSE:WRN). Sprott Asset Management had $1.5 million invested in the company at the end of the quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Western Copper and Gold Corporation (NYSE:WRN) but similarly valued. We will take a look at Investar Holding Corporation (NASDAQ:ISTR), Celyad Oncology SA (NASDAQ:CYAD), MVC Capital, Inc. (NYSE:MVC), Chemung Financial Corp. (NASDAQ:CHMG), Exterran Corporation (NYSE:EXTN), Synchronoss Technologies, Inc. (NASDAQ:SNCR), and Shore Bancshares, Inc. (NASDAQ:SHBI). This group of stocks’ market values resemble WRN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ISTR 5 13211 1
CYAD 1 126 -1
MVC 8 38046 0
CHMG 3 7400 0
EXTN 11 7114 -3
SNCR 10 6587 0
SHBI 5 19132 -1
Average 6.1 13088 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.1 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $2 million in WRN’s case. Exterran Corporation (NYSE:EXTN) is the most popular stock in this table. On the other hand Celyad Oncology SA (NASDAQ:CYAD) is the least popular one with only 1 bullish hedge fund positions. Western Copper and Gold Corporation (NYSE:WRN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WRN is 38.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately WRN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); WRN investors were disappointed as the stock returned -8.3% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

Follow Western Copper And Gold Corporation (NYSE:WRN)

Disclosure: None. This article was originally published at Insider Monkey.