The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Fortuna Silver Mines Inc. (NYSE:FSM).
Is Fortuna Silver Mines Inc. (NYSE:FSM) a bargain? Prominent investors are altogether in an optimistic mood. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings improved by 1 in recent months. In this way, there were 11 hedge funds in our database with FSM positions at the end of September. 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 Aerie Pharmaceuticals Inc (NASDAQ:AERI), James River Group Holdings Ltd (NASDAQ:JRVR), and Amicus Therapeutics, Inc. (NASDAQ:FOLD) 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.
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Hedge fund activity in Fortuna Silver Mines Inc. (NYSE:FSM)
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FSM over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Sprott Asset Management, led by Eric Sprott, holds the number one position in Fortuna Silver Mines Inc. (NYSE:FSM). Sprott Asset Management has a $26.8 million position in the stock. The second largest stake is held by D E Shaw, one of the largest hedge funds in the world,, which holds a $4.3 million position. Remaining peers that are bullish encompass Jim Simons’ Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that Sprott Asset Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, specific money managers have been driving this bullishness. Israel Englander’s Millennium Management initiated the most outsized position in Fortuna Silver Mines Inc. (NYSE:FSM). Millennium Management had $0.6 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks similar to Fortuna Silver Mines Inc. (NYSE:FSM). These stocks are Aerie Pharmaceuticals Inc (NASDAQ:AERI), James River Group Holdings Ltd (NASDAQ:JRVR), Amicus Therapeutics, Inc. (NASDAQ:FOLD), and Atlantic Tele-Network, Inc. (NASDAQ:ATNI). This group of stocks’ market valuations resemble FSM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AERI | 31 | 395104 | 14 |
| JRVR | 12 | 528157 | 3 |
| FOLD | 21 | 373077 | -2 |
| ATNI | 10 | 48009 | 1 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $336 million. That figure was $39 million in FSM’s case. Aerie Pharmaceuticals Inc (NASDAQ:AERI) is the most popular stock in this table. On the other hand Atlantic Tele-Network, Inc. (NASDAQ:ATNI) is the least popular one with only 10 bullish hedge fund positions. Fortuna Silver Mines Inc. (NYSE:FSM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AERI might be a better candidate to consider taking a long position in.
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Disclosure: None
