The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Gold Fields Limited (NYSE:GFI) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Gold Fields Limited (NYSE:GFI) undervalued? Investors who are in the know are in an optimistic mood. The number of bullish hedge fund bets increased by 4 lately. Our calculations also showed that GFI isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to analyze the new hedge fund action regarding Gold Fields Limited (NYSE:GFI).
What have hedge funds been doing with Gold Fields Limited (NYSE:GFI)?
Heading into the third quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GFI over the last 16 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Gold Fields Limited (NYSE:GFI), with a stake worth $126.9 million reported as of the end of March. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $25.8 million. AQR Capital Management, Anchor Bolt Capital, and Royce & Associates were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, specific money managers have been driving this bullishness. Anchor Bolt Capital, managed by Robert Polak, created the most outsized position in Gold Fields Limited (NYSE:GFI). Anchor Bolt Capital had $15.7 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $2.7 million investment in the stock during the quarter. The other funds with brand new GFI positions are Ray Dalio’s Bridgewater Associates, Noam Gottesman’s GLG Partners, and Michael Gelband’s ExodusPoint Capital.
Let’s check out hedge fund activity in other stocks similar to Gold Fields Limited (NYSE:GFI). These stocks are Pluralsight, Inc. (NASDAQ:PS), Ingevity Corporation (NYSE:NGVT), Virtu Financial Inc (NASDAQ:VIRT), and Teradata Corporation (NYSE:TDC). All of these stocks’ market caps are similar to GFI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PS | 20 | 212354 | -10 |
| NGVT | 21 | 217334 | -2 |
| VIRT | 16 | 120585 | -1 |
| TDC | 22 | 280507 | 2 |
| Average | 19.75 | 207695 | -2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $208 million. That figure was $210 million in GFI’s case. Teradata Corporation (NYSE:TDC) is the most popular stock in this table. On the other hand Virtu Financial Inc (NASDAQ:VIRT) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Gold Fields Limited (NYSE:GFI) is even less popular than VIRT. Hedge funds dodged a bullet by taking a bearish stance towards GFI. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately GFI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); GFI investors were disappointed as the stock returned -8.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
