Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in SSR Mining Inc. (NASDAQ:SSRM)? The smart money sentiment can provide an answer to this question.
Is SSRM a good stock to buy now? Hedge fund interest in SSR Mining Inc. (NASDAQ:SSRM) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that SSRM 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 GoHealth, Inc. (NASDAQ:GOCO), Silgan Holdings Inc. (NASDAQ:SLGN), and NeoGenomics, Inc. (NASDAQ:NEO) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most market participants, hedge funds are assumed to be underperforming, old financial tools of years past. While there are over 8000 funds with their doors open today, We look at the leaders of this group, around 850 funds. It is estimated that this group of investors handle the lion’s share of the hedge fund industry’s total capital, and by keeping track of their inimitable picks, Insider Monkey has come up with various investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum 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. Keeping this in mind we’re going to go over the latest hedge fund action regarding SSR Mining Inc. (NASDAQ:SSRM).
Do Hedge Funds Think SSRM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. On the other hand, there were a total of 15 hedge funds with a bullish position in SSRM a year ago. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Sprott Asset Management, managed by Eric Sprott, holds the biggest position in SSR Mining Inc. (NASDAQ:SSRM). Sprott Asset Management has a $116.2 million position in the stock, comprising 4.8% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding a $104.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish contain John Paulson’s Paulson & Co, Israel Englander’s Millennium Management and Peter Franklin Palmedo’s Sun Valley Gold. In terms of the portfolio weights assigned to each position Sun Valley Gold allocated the biggest weight to SSR Mining Inc. (NASDAQ:SSRM), around 5.89% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, earmarking 4.76 percent of its 13F equity portfolio to SSRM.
Due to the fact that SSR Mining Inc. (NASDAQ:SSRM) has witnessed a decline in interest from hedge fund managers, we can see that there was a specific group of hedgies that elected to cut their full holdings by the end of the third quarter. Intriguingly, Ken Heebner’s Capital Growth Management said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, valued at about $20.3 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $19 million worth. These bearish behaviors are interesting, as aggregate 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 SSR Mining Inc. (NASDAQ:SSRM). We will take a look at GoHealth, Inc. (NASDAQ:GOCO), Silgan Holdings Inc. (NASDAQ:SLGN), NeoGenomics, Inc. (NASDAQ:NEO), Nexstar Media Group, Inc. (NASDAQ:NXST), The Timken Company (NYSE:TKR), Mattel, Inc. (NASDAQ:MAT), and Companhia Siderurgica Nacional (NYSE:SID). This group of stocks’ market values are similar to SSRM’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 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $379 million. That figure was $306 million in SSRM’s case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand Companhia Siderurgica Nacional (NYSE:SID) is the least popular one with only 7 bullish hedge fund positions. SSR Mining Inc. (NASDAQ:SSRM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SSRM is 45.7. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and surpassed the market again by 15.8 percentage points. Unfortunately SSRM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SSRM investors were disappointed as the stock returned -3.9% since the end of September (through 12/14) 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 in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.