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Five Top-Performering Stocks Hedge Funds Overlooked

The first quarter of 2016 turned out to be a roller coaster ride for the broader market. While in the first -half of the quarter the indices were in a hurry to touch new lows, in the second-half they didn’t stop appreciating until they managed to recoup the losses suffered in the first-half. Amid all this volatility, most companies saw their stock moving from one extreme to another, only to end the quarter on a flat note. However, there were also a few companies whose stocks skyrocketed during the same period. Since enough has already been written about the stocks which plummeted heavily during the first quarter, in this post, we are going to buck the trend and focus on the top five performers of that period and also check out what the over 800 hedge funds we cover thought about these stocks while entering 2016.

We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).

#5 AngloGold Ashanti Limited (ADR) (NYSE:AU)

– Investors With Long Positions (as of December 31): 19

– Aggregate Value of Investors’ Holdings (as of December 31): $328.5 million

Owing largely to the rally of the gold price, shares of AngloGold Ashanti Limited (ADR) (NYSE:AU) managed to register gains of 92.8% in the first three months of 2016. It seems some hedge had already anticipated this move and that’s why the ownership of the company among funds covered by us increased by four during the October-December period. Notable investors, which initiated a stake in the company during the fourth quarter, included Billionaire Cliff Asness‘s AQR Capital Management, which purchased 226,481 shares of AngloGold Ashanti Limited (ADR)(NYSE:AU) during that period. For its fiscal 2015 fourth quarter, the company reported EPS of $0.16 on revenue of $1.06 billion, compared to a per share loss of $0.14 on revenue of $1.26 billion it had reported for the same quarter of the previous financial year. On March 8, analysts at RBC Capital downgraded the stock to ‘Sector Perform’ from ‘Outperform’.

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