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Hedge Funds Are Digging Wheaton Precious Metals Corp. (WPM)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Wheaton Precious Metals Corp. (NYSE:WPM).

Wheaton Precious Metals Corp. (NYSE:WPM) was in 25 hedge funds’ portfolios at the end of March. WPM investors should be aware of a decrease in hedge fund interest of late. There were 30 hedge funds in our database with WPM positions at the end of the previous quarter. Our calculations also showed that WPM isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

Today there are numerous tools shareholders use to analyze their stock investments. A couple of the most useful tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite investment managers can trounce the broader indices by a significant amount (see the details here).

TUDOR INVESTMENT CORP

Paul Tudor Jones of Tudor Investment Corp

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a gander at the latest hedge fund action encompassing Wheaton Precious Metals Corp. (NYSE:WPM).

How have hedgies been trading Wheaton Precious Metals Corp. (NYSE:WPM)?

At Q1’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the fourth quarter of 2019. On the other hand, there were a total of 19 hedge funds with a bullish position in WPM a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Sprott Asset Management, managed by Eric Sprott, holds the most valuable position in Wheaton Precious Metals Corp. (NYSE:WPM). Sprott Asset Management has a $106.2 million position in the stock, comprising 9.7% of its 13F portfolio. Sitting at the No. 2 spot is Horizon Asset Management, led by Murray Stahl, holding a $95.6 million position; the fund has 4.2% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism consist of Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and David Iben’s Kopernik Global Investors. In terms of the portfolio weights assigned to each position Kopernik Global Investors allocated the biggest weight to Wheaton Precious Metals Corp. (NYSE:WPM), around 10.32% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, setting aside 9.74 percent of its 13F equity portfolio to WPM.

Seeing as Wheaton Precious Metals Corp. (NYSE:WPM) has witnessed falling interest from the smart money, we can see that there exists a select few hedge funds that slashed their entire stakes heading into Q4. Interestingly, Israel Englander’s Millennium Management sold off the biggest position of all the hedgies monitored by Insider Monkey, totaling about $13 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also dumped its stock, about $11.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks similar to Wheaton Precious Metals Corp. (NYSE:WPM). We will take a look at Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), MPLX LP (NYSE:MPLX), Laboratory Corp. of America Holdings (NYSE:LH), and Cincinnati Financial Corporation (NASDAQ:CINF). This group of stocks’ market values are similar to WPM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ALNY 34 840647 1
MPLX 11 179942 -4
LH 45 1054505 -8
CINF 31 484343 0
Average 30.25 639859 -2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.25 hedge funds with bullish positions and the average amount invested in these stocks was $640 million. That figure was $545 million in WPM’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand MPLX LP (NYSE:MPLX) is the least popular one with only 11 bullish hedge fund positions. Wheaton Precious Metals Corp. (NYSE:WPM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on WPM as the stock returned 46.7% during the second quarter and outperformed the market by an even larger margin.

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