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Is Taseko Mines Limited (TGB) Going to Burn These Hedge Funds?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Taseko Mines Limited (NYSE:TGB), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Hedge fund interest in Taseko Mines Limited (NYSE:TGB) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare TGB to other stocks including Assertio Therapeutics, Inc. (NASDAQ:ASRT), Landmark Bancorp, Inc. (NASDAQ:LARK), and Severn Bancorp Inc (NASDAQ:SVBI) to get a better sense of its popularity.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to take a look at the new hedge fund action encompassing Taseko Mines Limited (NYSE:TGB).

Hedge fund activity in Taseko Mines Limited (NYSE:TGB)

Heading into the fourth quarter of 2019, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in TGB a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the largest position in Taseko Mines Limited (NYSE:TGB). Renaissance Technologies has a $3.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Vertex One Asset Management, led by John Thiessen, holding a $1.5 million position; 0.4% of its 13F portfolio is allocated to the stock. Other peers that are bullish comprise John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Vertex One Asset Management allocated the biggest weight to Taseko Mines Limited (NYSE:TGB), around 0.39% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0029 percent of its 13F equity portfolio to TGB.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Taseko Mines Limited (NYSE:TGB) but similarly valued. We will take a look at Assertio Therapeutics, Inc. (NASDAQ:ASRT), Landmark Bancorp, Inc. (NASDAQ:LARK), Severn Bancorp Inc (NASDAQ:SVBI), and CyberOptics Corporation (NASDAQ:CYBE). This group of stocks’ market values are closest to TGB’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASRT 12 18154 1
LARK 2 5685 0
SVBI 3 10634 0
CYBE 4 5550 -1
Average 5.25 10006 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $5 million in TGB’s case. Assertio Therapeutics, Inc. (NASDAQ:ASRT) is the most popular stock in this table. On the other hand Landmark Bancorp, Inc. (NASDAQ:LARK) is the least popular one with only 2 bullish hedge fund positions. Taseko Mines Limited (NYSE:TGB) is not the least popular stock in this group but hedge fund interest is still below average. 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately TGB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TGB investors were disappointed as the stock returned 0% during the first two months of the fourth quarter 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 70 percent of these stocks already outperformed the market in Q4.

Disclosure: None. This article was originally published at Insider Monkey.

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