Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Endeavour Silver Corp. (CAN) (NYSE:EXK) from the perspective of those elite funds.
Endeavour Silver Corp. (CAN) (NYSE:EXK) investors should pay attention to a decrease in hedge fund interest of late. EXK was in 4 hedge funds’ portfolios at the end of the third quarter of 2015. There were 7 hedge funds in our database with EXK positions at the end of the previous quarter. At the end of this article we will also compare EXK to other stocks including Cytosorbents Corp (NASDAQ:CTSO), CytRx Corporation (NASDAQ:CYTR), and Skullcandy Inc (NASDAQ:SKUL) to get a better sense of its popularity.
Now, we’re going to view the key action surrounding Endeavour Silver Corp. (CAN) (NYSE:EXK).
How are hedge funds trading Endeavour Silver Corp. (CAN) (NYSE:EXK)?
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of -43% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jim Simons’s Renaissance Technologies had the number one position in Endeavour Silver Corp. (CAN) (NYSE:EXK), worth close to $1.7 million, corresponding to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Royce & Associates, managed by Chuck Royce, which held a $1.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions encompass Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.
Seeing as Endeavour Silver Corp. (CAN) (NYSE:EXK) has faced bearish sentiment from the smart money, it’s easy to see that there was a specific group of fund managers that elected to cut their entire stakes heading into Q4. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management dumped the biggest stake of all the hedgies watched by Insider Monkey. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also said goodbye to its stock. These moves are intriguing to say the least, as total hedge fund interest was cut by 3 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks similar to Endeavour Silver Corp. (CAN) (NYSE:EXK). These stocks are Cytosorbents Corp (NASDAQ:CTSO), CytRx Corporation (NASDAQ:CYTR), Skullcandy Inc (NASDAQ:SKUL), and GulfMark Offshore, Inc. (NYSE:GLF). This group of stocks’ market caps are closest to EXK’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $18 million.That figure was $4 millions in EXK’s case. Skullcandy Inc (NASDAQ:SKUL) is the most popular stock in this table. On the other hand Cytosorbents Corp (NASDAQ:CTSO) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Endeavour Silver Corp. (CAN) (NYSE:EXK) is even less popular than CTSO. Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.