Hedge Funds Pulling Back From The Mining Industry ~ See Their Top Picks

Silver Wheaton Corp. (USA) (NYSE:SLW) also saw a decrease in interest from hedge funds as 24 firms held $216.26 million worth of stock in their portfolios at the end of March as opposed to 26 funds with $235.86 million at the end of 2014. Israel Englander’s Millennium Management added 2.56 million shares of  Silver Wheaton Corp. (USA) (NYSE:SLW) to its portfolio during the first three months of the year, taking its total stake to 2.65 million shares valued at $50.38 million. Despite hitting record production in the first quarter, the Canada-based mining company missed the top and bottom line estimates for its first quarter earnings owing to lower commodity prices. Silver Wheaton Corp. (USA) (NYSE:SLW)’s stock has depreciated by nearly 5% so far this year.

Insider Monkey tracks hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. These stocks were able to generate alpha because of their lower risk profile. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month. These stocks were slightly riskier, so their monthly alpha was 80 basis points (read the details here). Since the official launch of our small-cap strategy in August 2012 it has performed just as predicted, returning over 144% and beating the market by more than 84 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.

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