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Hedge Funds Aren’t Done Buying Pretium Resources Inc (PVG)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Pretium Resources Inc (NYSE:PVG) based on that data.

Is Pretium Resources Inc (NYSE:PVG) a good investment right now? The smart money is taking an optimistic view. The number of bullish hedge fund bets went up by 1 in recent months. Our calculations also showed that PVG 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.

To most market participants, hedge funds are perceived as slow, old investment tools of years past. While there are more than 8000 funds trading at present, Our experts hone in on the crème de la crème of this group, about 850 funds. These investment experts oversee most of the hedge fund industry’s total capital, and by shadowing their inimitable equity investments, Insider Monkey has discovered several investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

PAULSON & CO

John Paulson of Paulson & Co

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. Keeping this in mind let’s take a glance at the recent hedge fund action encompassing Pretium Resources Inc (NYSE:PVG).

What does smart money think about Pretium Resources Inc (NYSE:PVG)?

At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in PVG over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Pretium Resources Inc (NYSE:PVG) was held by Paulson & Co, which reported holding $13.6 million worth of stock at the end of September. It was followed by Bridger Management with a $8 million position. Other investors bullish on the company included Citadel Investment Group, Renaissance Technologies, and D E Shaw. In terms of the portfolio weights assigned to each position Sound Point Capital allocated the biggest weight to Pretium Resources Inc (NYSE:PVG), around 5.32% of its 13F portfolio. Bridger Management is also relatively very bullish on the stock, dishing out 0.92 percent of its 13F equity portfolio to PVG.

As aggregate interest increased, specific money managers have jumped into Pretium Resources Inc (NYSE:PVG) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in Pretium Resources Inc (NYSE:PVG). Arrowstreet Capital had $4 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $3.1 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Matthew Hulsizer’s PEAK6 Capital Management, and Peter Muller’s PDT Partners.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Pretium Resources Inc (NYSE:PVG) but similarly valued. These stocks are Addus Homecare Corporation (NASDAQ:ADUS), Alamo Group, Inc. (NYSE:ALG), ShockWave Medical, Inc. (NASDAQ:SWAV), and Futu Holdings Limited (NASDAQ:FUTU). This group of stocks’ market values are similar to PVG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ADUS 15 65282 -2
ALG 8 132111 1
SWAV 10 70180 -5
FUTU 3 452 0
Average 9 67006 -1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $67 million in PVG’s case. Addus Homecare Corporation (NASDAQ:ADUS) is the most popular stock in this table. On the other hand Futu Holdings Limited (NASDAQ:FUTU) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Pretium Resources Inc (NYSE:PVG) is more popular among hedge funds. 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 returned 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on PVG as the stock returned 56.8% so far in Q2 (through June 10th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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