We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Silvercorp Metals Inc. (NYSE:SVM) based on that data.
Is SVM a good stock to buy now? Silvercorp Metals Inc. (NYSE:SVM) has seen an increase in activity from the world’s largest hedge funds of late. Silvercorp Metals Inc. (NYSE:SVM) was in 8 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 12. Our calculations also showed that SVM 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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 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 12 best silver stocks to buy now to identify stocks with upside potential. 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 let’s take a peek at the recent hedge fund action surrounding Silvercorp Metals Inc. (NYSE:SVM).
What have hedge funds been doing with Silvercorp Metals Inc. (NYSE:SVM)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SVM over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Silvercorp Metals Inc. (NYSE:SVM), with a stake worth $37.7 million reported as of the end of September. Trailing Renaissance Technologies was Sprott Asset Management, which amassed a stake valued at $9.7 million. Two Sigma Advisors, Arrowstreet Capital, and D E Shaw 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 Sprott Asset Management allocated the biggest weight to Silvercorp Metals Inc. (NYSE:SVM), around 0.4% of its 13F portfolio. Knoll Capital Management is also relatively very bullish on the stock, dishing out 0.22 percent of its 13F equity portfolio to SVM.
Now, specific money managers have jumped into Silvercorp Metals Inc. (NYSE:SVM) headfirst. Knoll Capital Management, managed by Fred Knoll, initiated the largest position in Silvercorp Metals Inc. (NYSE:SVM). Knoll Capital Management had $0.3 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.1 million position during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Silvercorp Metals Inc. (NYSE:SVM). We will take a look at Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), Avaya Holdings Corp. (NYSE:AVYA), The Cheesecake Factory Incorporated (NASDAQ:CAKE), Kadant Inc. (NYSE:KAI), Trillium Therapeutics Inc. (NASDAQ:TRIL), First Merchants Corporation (NASDAQ:FRME), and Alexander’s, Inc. (NYSE:ALX). This group of stocks’ market values resemble SVM’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 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $206 million. That figure was $64 million in SVM’s case. Avaya Holdings Corp. (NYSE:AVYA) is the most popular stock in this table. On the other hand Kadant Inc. (NYSE:KAI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Silvercorp Metals Inc. (NYSE:SVM) is even less popular than KAI. Our overall hedge fund sentiment score for SVM is 27. 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 SVM. 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 31.6% in 2020 through December 2nd but managed to beat the market again by 16 percentage points. Unfortunately SVM wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SVM investors were disappointed as the stock returned -14.9% since the end of the third quarter (through 12/2) 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.
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Disclosure: None. This article was originally published at Insider Monkey.