Hedge Funds Are Selling Silver Standard Resources Inc. (USA) (SSRI)

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Is Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) a buy right now? The smart money is definitely getting less optimistic. The number of long hedge fund positions dropped by 2 in recent months. SSRI was in 12 hedge funds’ portfolios at the end of the third quarter of 2016. There were 14 hedge funds in our database with SSRI positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as DeVry Inc. (NYSE:DV), Vonage Holdings Corp. (NYSE:VG), and Cambrex Corporation (NYSE:CBM) to gather more data points.

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 check out the key action surrounding Silver Standard Resources Inc. (USA) (NASDAQ:SSRI).

How are hedge funds trading Silver Standard Resources Inc. (USA) (NASDAQ:SSRI)?

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 14% from one quarter earlier. On the other hand, there were a total of 10 hedge funds with a bullish position in SSRI at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in Silver Standard Resources Inc. (USA) (NASDAQ:SSRI). According to regulatory filings, the fund has a $61.1 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Peter Franklin Palmedo of Sun Valley Gold, with a $23.2 million position; 0.7% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism contain Ken Griffin’s Citadel Investment Group, Eric Sprott’s Sprott Asset Management and D. E. Shaw’s D E Shaw. We should note that two of these hedge funds (Sun Valley Gold and Sprott Asset Management) 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.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually dumped their positions entirely. It’s worth mentioning that David Iben’s Kopernik Global Investors dumped the largest stake of the 700 funds followed by Insider Monkey, totaling an estimated $17.2 million in Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $2.8 million worth of shares.

Let’s check out hedge fund activity in other stocks similar to Silver Standard Resources Inc. (USA) (NASDAQ:SSRI). We will take a look at DeVry Inc. (NYSE:DV), Vonage Holdings Corp. (NYSE:VG), Cambrex Corporation (NYSE:CBM), and China Lodging Group, Ltd (ADR) (NASDAQ:HTHT). This group of stocks’ market values match SSRI’s market value.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $202 million. That figure was $126 million in SSRI’s case. DeVry Inc. (NYSE:DV) is the most popular stock in this table. On the other hand China Lodging Group, Ltd (ADR) (NASDAQ:HTHT) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Silver Standard Resources Inc. (USA) (NASDAQ:SSRI) is even less popular than HTHT. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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