A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Harmony Gold Mining Co. (NYSE:HMY).
Is HMY a good stock to buy now? Harmony Gold Mining Co. (NYSE:HMY) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of September. Our calculations also showed that HMY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). 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 H&R Block, Inc. (NYSE:HRB), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), and First Citizens BancShares Inc. (NASDAQ:FCNCA) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are viewed as slow, outdated investment tools of the past. While there are greater than 8000 funds trading at present, Our experts choose to focus on the leaders of this club, about 850 funds. These hedge fund managers preside over the majority of the hedge fund industry’s total capital, and by shadowing their highest performing equity investments, Insider Monkey has discovered various investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to check out the recent hedge fund action surrounding Harmony Gold Mining Co. (NYSE:HMY).
Do Hedge Funds Think HMY Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HMY over the last 21 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.
More specifically, Arrowstreet Capital was the largest shareholder of Harmony Gold Mining Co. (NYSE:HMY), with a stake worth $25.1 million reported as of the end of September. Trailing Arrowstreet Capital was Renaissance Technologies, which amassed a stake valued at $23.9 million. AQR Capital Management, Citadel Investment Group, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Arrowstreet Capital allocated the biggest weight to Harmony Gold Mining Co. (NYSE:HMY), around 0.04% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to HMY.
Seeing as Harmony Gold Mining Co. (NYSE:HMY) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there was a specific group of money managers who sold off their entire stakes last quarter. Intriguingly, Eric Sprott’s Sprott Asset Management said goodbye to the largest stake of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $3.8 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also sold off its stock, about $1.7 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Harmony Gold Mining Co. (NYSE:HMY). These stocks are H&R Block, Inc. (NYSE:HRB), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), First Citizens BancShares Inc. (NASDAQ:FCNCA), Perspecta Inc. (NYSE:PRSP), Rapid7 Inc (NASDAQ:RPD), Synovus Financial Corp. (NYSE:SNV), and Clean Harbors Inc (NYSE:CLH). This group of stocks’ market values are closest to HMY’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $291 million. That figure was $57 million in HMY’s case. Perspecta Inc. (NYSE:PRSP) is the most popular stock in this table. On the other hand First Citizens BancShares Inc. (NASDAQ:FCNCA) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Harmony Gold Mining Co. (NYSE:HMY) is even less popular than FCNCA. Our overall hedge fund sentiment score for HMY is 30. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards HMY. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th but managed to beat the market again by 16.2 percentage points. Unfortunately HMY wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); HMY investors were disappointed as the stock returned -14.4% since the end of the third quarter (through 12/8) 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 most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.