The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Gold Fields Limited (NYSE:GFI) based on those filings.
Gold Fields Limited (NYSE:GFI) has experienced an increase in hedge fund sentiment in recent months. GFI was in 22 hedge funds’ portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with GFI holdings at the end of the previous quarter. Our calculations also showed that GFI 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
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. With all of this in mind let’s take a peek at the latest hedge fund action encompassing Gold Fields Limited (NYSE:GFI).
What have hedge funds been doing with Gold Fields Limited (NYSE:GFI)?
Heading into the second quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in GFI a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Gold Fields Limited (NYSE:GFI), with a stake worth $97.3 million reported as of the end of September. Trailing Renaissance Technologies was Sprott Asset Management, which amassed a stake valued at $51.6 million. Arrowstreet Capital, AQR Capital Management, and GLG Partners 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 Anchor Bolt Capital allocated the biggest weight to Gold Fields Limited (NYSE:GFI), around 11.84% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, earmarking 4.73 percent of its 13F equity portfolio to GFI.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Tudor Investment Corp, managed by Paul Tudor Jones, established the most outsized position in Gold Fields Limited (NYSE:GFI). Tudor Investment Corp had $0.9 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.8 million investment in the stock during the quarter. The other funds with brand new GFI positions are Lee Ainslie’s Maverick Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Gold Fields Limited (NYSE:GFI). We will take a look at Comerica Incorporated (NYSE:CMA), Beyond Meat, Inc. (NASDAQ:BYND), Syneos Health, Inc. (NASDAQ:SYNH), and The Mosaic Company (NYSE:MOS). This group of stocks’ market caps match GFI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $216 million. That figure was $245 million in GFI’s case. Comerica Incorporated (NYSE:CMA) is the most popular stock in this table. On the other hand Beyond Meat, Inc. (NASDAQ:BYND) is the least popular one with only 13 bullish hedge fund positions. Gold Fields Limited (NYSE:GFI) 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 GFI as the stock returned 68.6% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.