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Hedge Funds Digging SSR Mining Inc. (SSRM)

In this article we will check out the progression of hedge fund sentiment towards SSR Mining Inc. (NASDAQ:SSRM) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

SSR Mining Inc. (NASDAQ:SSRM) was in 22 hedge funds’ portfolios at the end of March. SSRM investors should pay attention to an increase in hedge fund sentiment lately. There were 16 hedge funds in our database with SSRM positions at the end of the previous quarter. Our calculations also showed that SSRM 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.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ken Griffin

Ken Griffin of Citadel Investment Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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 we’re going to analyze the new hedge fund action regarding SSR Mining Inc. (NASDAQ:SSRM).

What have hedge funds been doing with SSR Mining Inc. (NASDAQ:SSRM)?

At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in SSRM a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is SSRM A Good Stock To Buy?

Among these funds, Renaissance Technologies held the most valuable stake in SSR Mining Inc. (NASDAQ:SSRM), which was worth $79.5 million at the end of the third quarter. On the second spot was Millennium Management which amassed $19.5 million worth of shares. Paulson & Co, Citadel Investment Group, and Sprott Asset 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 Paulson & Co allocated the biggest weight to SSR Mining Inc. (NASDAQ:SSRM), around 0.5% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, designating 0.47 percent of its 13F equity portfolio to SSRM.

Now, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most valuable position in SSR Mining Inc. (NASDAQ:SSRM). Marshall Wace LLP had $2 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are Joel Greenblatt’s Gotham Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as SSR Mining Inc. (NASDAQ:SSRM) but similarly valued. These stocks are Fanhua Inc. (NASDAQ:FANH), Palomar Holdings, Inc. (NASDAQ:PLMR), Vector Group Ltd (NYSE:VGR), and Hostess Brands, Inc. (NASDAQ:TWNK). This group of stocks’ market valuations are similar to SSRM’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FANH 5 4287 -2
PLMR 7 47406 -1
VGR 16 123143 -1
TWNK 30 165605 -7
Average 14.5 85110 -2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $152 million in SSRM’s case. Hostess Brands, Inc. (NASDAQ:TWNK) is the most popular stock in this table. On the other hand Fanhua Inc. (NASDAQ:FANH) is the least popular one with only 5 bullish hedge fund positions. SSR Mining Inc. (NASDAQ:SSRM) is not the most popular stock in this group but hedge fund interest is still above 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 but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on SSRM as the stock returned 72.4% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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