Franco-Nevada Corporation (NYSE:FNV) was in 14 hedge funds’ portfolio at the end of March. FNV investors should pay attention to an increase in enthusiasm from smart money of late. There were 11 hedge funds in our database with FNV holdings at the end of the previous quarter.
To most stock holders, hedge funds are viewed as slow, old investment tools of the past. While there are over 8000 funds trading at present, we hone in on the top tier of this group, close to 450 funds. It is widely believed that this group controls most of the hedge fund industry’s total capital, and by paying attention to their highest performing investments, we have spotted a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as integral, bullish insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are a number of stimuli for an insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).
Now, we’re going to take a gander at the key action regarding Franco-Nevada Corporation (NYSE:FNV).
What have hedge funds been doing with Franco-Nevada Corporation (NYSE:FNV)?
At the end of the first quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 27% from the first quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Franco-Nevada Corporation (NYSE:FNV). First Eagle Investment Management has a $45.8 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is 3G Capital, managed by Jorge Paulo Lemann, which held a $23.7 million position; 2.2% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, Chuck Royce’s Royce & Associates and John Thiessen’s Vertex One Asset Management.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. 3G Capital, managed by Jorge Paulo Lemann, established the biggest position in Franco-Nevada Corporation (NYSE:FNV). 3G Capital had 23.7 million invested in the company at the end of the quarter. John Thiessen’s Vertex One Asset Management also initiated a $10 million position during the quarter. The following funds were also among the new FNV investors: Matthew Hulsizer’s PEAK6 Capital Management, Michael Hintze’s CQS Cayman LP, and Ray Dalio’s Bridgewater Associates.
What have insiders been doing with Franco-Nevada Corporation (NYSE:FNV)?
Insider buying is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, Franco-Nevada Corporation (NYSE:FNV) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Franco-Nevada Corporation (NYSE:FNV). These stocks are Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), Gold Fields Limited (ADR) (NYSE:GFI), Compania de Minas Buenaventura SA (ADR) (NYSE:BVN), Agnico-Eagle Mines Limited (USA) (NYSE:AEM), and Eldorado Gold Corp (USA) (NYSE:EGO). All of these stocks are in the gold industry and their market caps resemble FNV’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Randgold Resources Ltd. (ADR) (NASDAQ:GOLD)||12||0||0|
|Gold Fields Limited (ADR) (NYSE:GFI)||20||0||0|
|Compania de Minas Buenaventura SA (ADR) (NYSE:BVN)||10||0||0|
|Agnico-Eagle Mines Limited (USA) (NYSE:AEM)||25||0||0|
|Eldorado Gold Corp (USA) (NYSE:EGO)||19||0||0|
With the returns demonstrated by the aforementioned tactics, retail investors must always watch hedge fund and insider trading activity, and Franco-Nevada Corporation (NYSE:FNV) is no exception.