The equity market returns were very disappointing in the third quarter, “thanks” to the slowdown of China’s economy and the weaker-than-expected U.S. economic data. It was not entirely clear whether the broader market sell-off made U.S. equity valuations undervalued, but it definitely made them more attractive. It is worth mentioning that Russell 2000 ETF (IWM) underperformed the broad-market S&P 500 ETF by more than 14 percentage points during the period of June 25, 2015 through October 30, 2015. This clearly points to the fact that most investors, including hedge fund firms and institutional investors, heavily cut their exposure to high-potential (but seemingly riskier) small-cap stocks during the bloody third quarter. So let’s take a glance at the smart money sentiment towards Sibanye Gold Ltd (ADR) (NYSE:SBGL) and see how it was affected.
Sibanye Gold Ltd (ADR) (NYSE:SBGL) investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. At the end of this article, we will also compare Sibanye Gold Ltd (ADR) (NYSE:SBGL) to other stocks, including Renren Inc (NYSE:RENN), TerraForm Global Inc (NASDAQ:GLBL), and MiMedx Group Inc (NASDAQ:MDXG) to get a better sense of its popularity.
If you’d ask most investors, hedge funds are viewed as worthless, old financial vehicles of years past. While there are greater than 8000 funds in operation today, our experts choose to focus on the leaders of this group, about 700 funds. Most estimates calculate that this group of people presides over the majority of the smart money’s total capital, and by following their matchless investments, Insider Monkey has unsheathed a few investment strategies that have historically exceeded Mr. Market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, let’s view the recent action regarding Sibanye Gold Ltd (ADR) (NYSE:SBGL).
How have hedgies been trading Sibanye Gold Ltd (ADR) (NYSE:SBGL)?
Heading into Q4, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 11% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies holds the number one position in Sibanye Gold Ltd (ADR) (NYSE:SBGL). Renaissance Technologies has an $8 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $5.1 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism encompass Ari Zweiman’s 683 Capital Partners, Matthew Hulsizer’s PEAK6 Capital Management, and Ken Griffin’s Citadel Investment Group.