Hedge Funds Are Selling Kinross Gold Corporation (KGC)

In this article you are going to find out whether hedge funds think Kinross Gold Corporation (NYSE:KGC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Kinross Gold Corporation (NYSE:KGC) investors should pay attention to a decrease in hedge fund interest in recent months. Kinross Gold Corporation (NYSE:KGC) was in 27 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. Our calculations also showed that KGC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to view the key hedge fund action encompassing Kinross Gold Corporation (NYSE:KGC).

Do Hedge Funds Think KGC Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in KGC over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in Kinross Gold Corporation (NYSE:KGC), which was worth $176.2 million at the end of the third quarter. On the second spot was Sprott Asset Management which amassed $48.3 million worth of shares. Quaker Capital Investments, Citadel Investment Group, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Quaker Capital Investments allocated the biggest weight to Kinross Gold Corporation (NYSE:KGC), around 7.26% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, dishing out 3.17 percent of its 13F equity portfolio to KGC.

Judging by the fact that Kinross Gold Corporation (NYSE:KGC) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there were a few funds that decided to sell off their full holdings last quarter. It’s worth mentioning that Ali Motamed’s Invenomic Capital Management said goodbye to the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling about $2.7 million in stock. Donald Sussman’s fund, Paloma Partners, also dumped its stock, about $0.5 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Kinross Gold Corporation (NYSE:KGC). These stocks are TopBuild Corp (NYSE:BLD), Envista Holdings Corporation (NYSE:NVST), American Campus Communities, Inc. (NYSE:ACC), Eastgroup Properties Inc (NYSE:EGP), Toll Brothers Inc (NYSE:TOL), First Industrial Realty Trust, Inc. (NYSE:FR), and Euronet Worldwide, Inc. (NASDAQ:EEFT). This group of stocks’ market valuations are closest to KGC’s market valuation.

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As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $408 million. That figure was $321 million in KGC’s case. Euronet Worldwide, Inc. (NASDAQ:EEFT) is the most popular stock in this table. On the other hand Eastgroup Properties Inc (NYSE:EGP) is the least popular one with only 13 bullish hedge fund positions. Kinross Gold Corporation (NYSE:KGC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KGC is 54.5. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately KGC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on KGC were disappointed as the stock returned -1.2% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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