The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtFirst Majestic Silver Corp (NYSE:AG) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
First Majestic Silver Corp (NYSE:AG) has experienced a decrease in hedge fund interest lately. AG was in 13 hedge funds’ portfolios at the end of March. There were 16 hedge funds in our database with AG positions at the end of the previous quarter. Our calculations also showed that AG 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.
At the moment there are a large number of metrics stock market investors use to value their stock investments. A couple of the less utilized metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can outclass their index-focused peers by a healthy margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the top 20 agriculture producing countries to identify emerging companies that are likely to deliver 1000% gains in the coming years. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the key hedge fund action surrounding First Majestic Silver Corp (NYSE:AG).
How have hedgies been trading First Majestic Silver Corp (NYSE:AG)?
At Q1’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards AG 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.
More specifically, Renaissance Technologies was the largest shareholder of First Majestic Silver Corp (NYSE:AG), with a stake worth $30 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $7.4 million. Arrowstreet Capital, Sprott Asset Management, and D E Shaw 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 Sprott Asset Management allocated the biggest weight to First Majestic Silver Corp (NYSE:AG), around 0.44% of its 13F portfolio. CQS Cayman LP is also relatively very bullish on the stock, designating 0.06 percent of its 13F equity portfolio to AG.
Due to the fact that First Majestic Silver Corp (NYSE:AG) has faced falling interest from the smart money, we can see that there lies a certain “tier” of fund managers that elected to cut their full holdings by the end of the first quarter. Intriguingly, Ken Griffin’s Citadel Investment Group sold off the largest investment of all the hedgies tracked by Insider Monkey, worth about $60.1 million in stock, and David Greenspan’s Slate Path Capital was right behind this move, as the fund sold off about $2.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds by the end of the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as First Majestic Silver Corp (NYSE:AG) but similarly valued. We will take a look at Cubic Corporation (NYSE:CUB), Avanos Medical (NYSE:AVNS), Core-Mark Holding Company, Inc. (NASDAQ:CORE), and Innovative Industrial Properties, Inc. (NYSE:IIPR). This group of stocks’ market values resemble AG’s market value.
|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 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $58 million in AG’s case. Core-Mark Holding Company, Inc. (NASDAQ:CORE) is the most popular stock in this table. On the other hand Innovative Industrial Properties, Inc. (NYSE:IIPR) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks First Majestic Silver Corp (NYSE:AG) is even less popular than IIPR. Hedge funds clearly dropped the ball on AG as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on AG as the stock returned 47.5% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.