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 IAMGOLD Corporation (NYSE:IAG) based on those filings.
IAMGOLD Corporation (NYSE:IAG) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of March. At the end of this article we will also compare IAG to other stocks including HNI Corp (NYSE:HNI), Tennant Company (NYSE:TNC), and Six Flags Entertainment Corp (NYSE:SIX) to get a better sense of its popularity.
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In today’s marketplace there are several methods market participants put to use to analyze stocks. A couple of the most useful methods are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite investment managers can outclass the market by a significant amount (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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 take a look at the latest hedge fund action surrounding IAMGOLD Corporation (NYSE:IAG).
What does smart money think about IAMGOLD Corporation (NYSE:IAG)?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IAG over the last 18 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in IAMGOLD Corporation (NYSE:IAG) was held by Renaissance Technologies, which reported holding $53.2 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $11.2 million position. Other investors bullish on the company included Citadel Investment Group, Contrarius Investment Management, and Sprott Asset Management. In terms of the portfolio weights assigned to each position Contrarius Investment Management allocated the biggest weight to IAMGOLD Corporation (NYSE:IAG), around 0.87% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, earmarking 0.61 percent of its 13F equity portfolio to IAG.
Judging by the fact that IAMGOLD Corporation (NYSE:IAG) has experienced a decline in interest from the smart money, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their full holdings by the end of the first quarter. Intriguingly, Peter Franklin Palmedo’s Sun Valley Gold dumped the largest position of all the hedgies followed by Insider Monkey, valued at an estimated $16.9 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also cut its stock, about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as IAMGOLD Corporation (NYSE:IAG) but similarly valued. These stocks are HNI Corp (NYSE:HNI), Tennant Company (NYSE:TNC), Six Flags Entertainment Corp (NYSE:SIX), and Asbury Automotive Group, Inc. (NYSE:ABG). This group of stocks’ market valuations are similar to IAG’s market valuation.
|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 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $107 million in IAG’s case. Six Flags Entertainment Corp (NYSE:SIX) is the most popular stock in this table. On the other hand Tennant Company (NYSE:TNC) is the least popular one with only 11 bullish hedge fund positions. IAMGOLD Corporation (NYSE:IAG) 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 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on IAG as the stock returned 52.9% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.