Is Allied Nevada Gold Corp. (ANV) Going to Burn These Hedge Funds?

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Is Allied Nevada Gold Corp. (NYSEAMEX:ANV) worth your attention right now? Prominent investors are in an optimistic mood. The number of long hedge fund bets moved up by 4 lately.

In the eyes of most stock holders, hedge funds are viewed as worthless, outdated financial tools of the past. While there are over 8000 funds trading at the moment, we at Insider Monkey hone in on the elite of this club, about 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by tracking their top investments, we have deciphered a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as beneficial, optimistic insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are lots of incentives for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if investors know where to look (learn more here).

With all of this in mind, we’re going to take a peek at the key action regarding Allied Nevada Gold Corp. (NYSEAMEX:ANV).

How have hedgies been trading Allied Nevada Gold Corp. (NYSEAMEX:ANV)?

At the end of the first quarter, a total of 15 of the hedge funds we track were long in this stock, a change of 36% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.

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According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in Allied Nevada Gold Corp. (NYSEAMEX:ANV), worth close to $74.6 million, accounting for 0.2% of its total 13F portfolio. On Royce & Associates’s heels is Taconic Capital, managed by Frank Brosens, which held a $32.9 million position; 1.2% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include John Paulson’s Paulson & Co, Jim Simons’s Renaissance Technologies and Eric Sprott’s Sprott Asset Management.

As one would reasonably expect, key hedge funds have been driving this bullishness. Taconic Capital, managed by Frank Brosens, established the biggest position in Allied Nevada Gold Corp. (NYSEAMEX:ANV). Taconic Capital had 32.9 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $8.7 million investment in the stock during the quarter. The other funds with brand new ANV positions are Dmitry Balyasny’s Balyasny Asset Management, Glenn Russell Dubin’s Highbridge Capital Management, and D. E. Shaw’s D E Shaw.

Insider trading activity in Allied Nevada Gold Corp. (NYSEAMEX:ANV)

Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, Allied Nevada Gold Corp. (NYSEAMEX:ANV) has seen 2 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Allied Nevada Gold Corp. (NYSEAMEX:ANV). These stocks are IAMGOLD Corporation (USA) (NYSE:IAG), Las Vegas Sands Corp. (NYSE:SAND), Central GoldTrust (NYSEAMEX:GTU), NovaGold Resources Inc. (USA) (NYSEAMEX:NG), and AuRico Gold Inc (USA) (NYSE:AUQ). This group of stocks are in the gold industry and their market caps resemble ANV’s market cap.

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