The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Newmont Corporation (NYSE:NEM).
Is NEM stock a buy or sell? Newmont Corporation (NYSE:NEM) investors should be aware of a decrease in hedge fund interest recently. Newmont Corporation (NYSE:NEM) was in 50 hedge funds’ portfolios at the end of December. The all time high for this statistic is 55. There were 55 hedge funds in our database with NEM positions at the end of the third quarter. Our calculations also showed that NEM isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock that will deliver a 10x return. 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 homepage (or at the end of this article).With all of this in mind we’re going to analyze the recent hedge fund action regarding Newmont Corporation (NYSE:NEM).
Do Hedge Funds Think NEM Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 50 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NEM over the last 22 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Newmont Corporation (NYSE:NEM), which was worth $287.8 million at the end of the fourth quarter. On the second spot was AQR Capital Management which amassed $253.2 million worth of shares. International Value Advisers, D E Shaw, and Driehaus Capital 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 International Value Advisers allocated the biggest weight to Newmont Corporation (NYSE:NEM), around 16.47% of its 13F portfolio. Heathbridge Capital Management is also relatively very bullish on the stock, setting aside 9.38 percent of its 13F equity portfolio to NEM.
Because Newmont Corporation (NYSE:NEM) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few money managers who were dropping their entire stakes by the end of the fourth quarter. At the top of the heap, Rajiv Jain’s GQG Partners dropped the largest position of the 750 funds monitored by Insider Monkey, totaling an estimated $331.6 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $42.2 million worth. These transactions are important to note, as total hedge fund interest was cut by 5 funds by the end of the fourth quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Newmont Corporation (NYSE:NEM) but similarly valued. We will take a look at Eaton Corporation plc (NYSE:ETN), Relx PLC (NYSE:RELX), CrowdStrike Holdings, Inc. (NASDAQ:CRWD), Canadian Pacific Railway Limited (NYSE:CP), Kimberly Clark Corporation (NYSE:KMB), Las Vegas Sands Corp. (NYSE:LVS), and Lululemon Athletica inc. (NASDAQ:LULU). This group of stocks’ market caps resemble NEM’s market cap.
|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 45 hedge funds with bullish positions and the average amount invested in these stocks was $2167 million. That figure was $1213 million in NEM’s case. CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is the most popular stock in this table. On the other hand Relx PLC (NYSE:RELX) is the least popular one with only 8 bullish hedge fund positions. Newmont Corporation (NYSE:NEM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NEM is 52.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately NEM wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on NEM were disappointed as the stock returned 4.4% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.