Is Goldcorp Inc. (GG) Going to Burn These Hedge Funds?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Goldcorp Inc. (NYSE:GG).

Goldcorp Inc. (NYSE:GG) investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. Our calculations also showed that GG isn’t among the 30 most popular stocks among hedge funds.

In the 21st century investor’s toolkit there are many methods market participants put to use to grade their stock investments. A pair of the most underrated methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best investment managers can trounce their index-focused peers by a solid amount (see the details here).


Let’s review the latest hedge fund action regarding Goldcorp Inc. (NYSE:GG).

How have hedgies been trading Goldcorp Inc. (NYSE:GG)?

At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the second quarter of 2018. By comparison, 26 hedge funds held shares or bullish call options in GG heading into this year. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).


According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the number one position in Goldcorp Inc. (NYSE:GG). AQR Capital Management has a $25.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is David Iben of Kopernik Global Investors, with a $13.7 million position; 2.6% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism contain Ken Griffin’s Citadel Investment Group, and John Paulson’s Paulson & Co.

Seeing as Goldcorp Inc. (NYSE:GG) has faced bearish sentiment from the smart money, logic holds that there was a specific group of hedge funds that decided to sell off their positions entirely in the third quarter. Intriguingly, Brian Ashford-Russell and Tim Woolley’s Polar Capital dumped the largest investment of all the hedgies monitored by Insider Monkey, worth about $18.3 million in stock, and Jim Simons’s Renaissance Technologies was right behind this move, as the fund cut about $8.7 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 3 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Goldcorp Inc. (NYSE:GG). These stocks are Pinnacle West Capital Corporation (NYSE:PNW), Cimarex Energy Co (NYSE:XEC), Hyatt Hotels Corporation (NYSE:H), and Teledyne Technologies Incorporated (NYSE:TDY). This group of stocks’ market valuations match GG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PNW 20 630912 3
XEC 23 1185374 2
H 31 826605 -7
TDY 19 436271 -5
Average 23.25 769791 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $770 million. That figure was $95 million in GG’s case. Hyatt Hotels Corporation (NYSE:H) is the most popular stock in this table. On the other hand Teledyne Technologies Incorporated (NYSE:TDY) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Goldcorp Inc. (NYSE:GG) is even less popular than TDY. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, 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.

Disclosure: None. This article was originally published at Insider Monkey.