Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.
Is Sandstorm Gold Ltd. (NYSEMKT:SAND) a bargain? The best stock pickers are altogether getting more bullish. The number of long hedge fund positions experienced an increase of 1 in recent months. There were 10 hedge funds in our database with SAND holdings at the end of the previous quarter, versus 11 at the end of Q3. At the end of this article we will also compare SAND to other stocks including Encore Wire Corporation (NASDAQ:WIRE), Constellium NV (NYSE:CSTM), and Wave Life Sciences Ltd (NASDAQ:WVE) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, we’re going to take a glance at the fresh action regarding Sandstorm Gold Ltd. (NYSEMKT:SAND).
Hedge fund activity in Sandstorm Gold Ltd. (NYSE:SAND)
Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in SAND heading into this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world, has the most valuable position in Sandstorm Gold Ltd. (NYSE:SAND), worth close to $7.1 million, corresponding to less than 0.1% of its total 13F portfolio. Coming in second is D E Shaw, with a $4.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism include Israel Englander’s Millennium Management, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors and Murray Stahl’s Horizon Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.