Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Sibanye Gold Ltd (ADR) (NYSE:SBGL).
Sibanye Gold Ltd (ADR) (NYSE:SBGL) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. There were 8 hedge funds in our database with SBGL holdings at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Apple Hospitality REIT Inc (NYSE:APLE), ONE Gas Inc (NYSE:OGS), and Hawaiian Electric Industries, Inc. (NYSE:HE) to gather more data points.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
How have hedgies been trading Sibanye Gold Ltd (ADR) (NYSE:SBGL)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, down by 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SBGL over the last 5 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the largest position in Sibanye Gold Ltd (ADR) (NYSE:SBGL), worth close to $10.6 million. The second largest stake is held by Renaissance Technologies, one of the largest hedge funds in the world, holding a $3.8 million position. Some other professional money managers that hold long positions comprise Ray Dalio’s Bridgewater Associates, David Costen Haley’s HBK Investments and Cliff Asness’ AQR Capital Management. We should note that Bridgewater Associates is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.