Is Silver Wheaton Corp. (USA) (NYSE:SLW) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments. More recently the top 30 mid-cap stocks (market caps between $1 billion and $10 billion) among hedge funds delivered an average return of 18% during the last four quarters (S&P 500 Index funds returned only 7.6% during the same period).
It looks like hedge funds are taking a pessimistic view towards Silver Wheaton, as the number of investors from our database bullish on the stock declined by two to 27 during the third quarter. However, 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 Global Payments Inc (NYSE:GPN), Quest Diagnostics Inc (NYSE:DGX), and CMS Energy Corporation (NYSE:CMS) to gather more data points.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
With all of this in mind, let’s take a peek at the new action regarding Silver Wheaton Corp. (USA) (NYSE:SLW).
What does the smart money think about Silver Wheaton Corp. (USA) (NYSE:SLW)?
Heading into the fourth quarter of 2016, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on Silver Wheaton, which represents a decline of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SLW over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Horizon Asset Management, led by Murray Stahl, holds the most valuable position in Silver Wheaton Corp. (USA) (NYSE:SLW). Horizon Asset Management has a $130 million position in the stock, comprising 3.6% of its 13F portfolio. The second most bullish fund manager is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, with a $113.1 million position; 0.4% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions contain David Iben’s Kopernik Global Investors, Eric Sprott’s Sprott Asset Management, and Cliff Asness’ AQR Capital Management. We should note that two of these hedge funds (Kopernik Global Investors and Sprott Asset Management) are 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.