After a lengthy stretch of outperformance, small-cap stocks suffered from July 2015 through June 2016, as heightened global economic fears led investors to flee to the safe havens of large-cap stocks and other instruments. Those stocks outperformed small-caps by about 10 percentage points during that time, with small-cap healthcare stocks being particularly hard hit. However, the tide has since turned in a big way, as evidenced by small-caps toppling their large-cap peers by 5 percentage points in the third quarter, and by another 5 percentage points in the first seven weeks of the fourth quarter. In this article, we’ll analyze how this shift affected hedge funds’ Q3 trading of AngloGold Ashanti Limited (ADR) (NYSE:AU) and see how the stock is affected by the recent hedge fund activity.
Is AngloGold Ashanti Limited (ADR) (NYSE:AU) a great stock to buy now? The smart money is actually taking a pessimistic view. The number of bullish hedge fund positions went down by 6 in recent months. 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 Helmerich & Payne, Inc. (NYSE:HP), Antero Resources Corp (NYSE:AR), and Comerica Incorporated (NYSE:CMA) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about AngloGold Ashanti Limited (ADR) (NYSE:AU)?
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a fall of 22% from the second quarter of 2016. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Paulson & Co, managed by John Paulson, holds the largest position in AngloGold Ashanti Limited (ADR) (NYSE:AU). Paulson & Co has a $203.5 million position in the stock, comprising 2.2% of its 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $67.2 million position. Other members of the smart money with similar optimism include Jim Simons’ Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and John Burbank’s Passport Capital.