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How Hedge Funds Traded Avino Silver (ASM) During The Crash

In this article we will take a look at whether hedge funds think Avino Silver (NYSE:ASM) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Avino Silver (NYSE:ASM) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of March. 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 Life Technologies Corp. (NASDAQ:LIFE), Streamline Health Solutions Inc. (NASDAQ:STRM), and TransGlobe Energy Corporation (NASDAQ:TGA) to gather more data points. Our calculations also showed that ASM 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ken Griffin

Ken Griffin of Citadel Investment Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the new hedge fund action regarding Avino Silver (NYSE:ASM).

Hedge fund activity in Avino Silver (NYSE:ASM)

At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2019. On the other hand, there were a total of 3 hedge funds with a bullish position in ASM a year ago. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

Is ASM A Good Stock To Buy?

According to Insider Monkey’s hedge fund database, Sprott Asset Management, managed by Eric Sprott, holds the largest position in Avino Silver (NYSE:ASM). Sprott Asset Management has a $0.7 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, which holds a $0.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to Avino Silver (NYSE:ASM), around 0.06% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0001 percent of its 13F equity portfolio to ASM.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Avino Silver (NYSE:ASM) but similarly valued. We will take a look at Life Technologies Corp. (NASDAQ:LIFE), Streamline Health Solutions Inc. (NASDAQ:STRM), TransGlobe Energy Corporation (NASDAQ:TGA), and Mereo BioPharma Group plc (NASDAQ:MREO). This group of stocks’ market values are similar to ASM’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LIFE 6 4513 3
STRM 5 9750 0
TGA 4 2057 0
MREO 1 187 -1
Average 4 4127 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $1 million in ASM’s case. Life Technologies Corp. (NASDAQ:LIFE) is the most popular stock in this table. On the other hand Mereo BioPharma Group plc (NASDAQ:MREO) is the least popular one with only 1 bullish hedge fund positions. Avino Silver (NYSE:ASM) 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 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on ASM as the stock returned 94.1% during the second quarter and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.