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Should You Buy Goldcorp Inc. (USA) (GG)?

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. In this article we are going to take a look at smart money sentiment towards Goldcorp Inc. (USA) (NYSE:GG).

Goldcorp Inc. (USA) (NYSE:GG) shareholders have witnessed an increase in hedge fund interest in recent months. At the end of this article we will also compare GG to other stocks, including Grifols SA, Barcelona (NASDAQ:GRFS), Lam Research Corporation (NASDAQ:LRCX), and Jarden Corp (NYSE:JAH) to get a better sense of its popularity.

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If you’d ask most traders, hedge funds are viewed as slow, outdated financial tools of the past. While there are over 8000 funds trading today, We hone in on the bigwigs of this group, approximately 700 funds. These money managers have their hands on the lion’s share of the smart money’s total asset base, and by observing their matchless equity investments, Insider Monkey has come up with a number of investment strategies that have historically outrun the market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, we’re going to check out the latest action surrounding Goldcorp Inc. (USA) (NYSE:GG).

What have hedge funds been doing with Goldcorp Inc. (USA) (NYSE:GG)?

At the Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the largest position in Goldcorp Inc. (USA) (NYSE:GG), worth close to $123.4 million, amounting to 0.2% of its total 13F portfolio. The second largest stake is held by Highfields Capital Management, managed by Jonathon Jacobson, which holds an $31.3 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers that are bullish contain Cliff Asness’s AQR Capital Management and David Iben’s Kopernik Global Investors.

Consequently, specific money managers have jumped into Goldcorp Inc. (USA) (NYSE:GG) headfirst. Highfields Capital Management initiated the biggest position in Goldcorp Inc. (USA) (NYSE:GG). Robert Bishop’s Impala Asset Management also initiated an $22.8 million position during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Steve Cohen’s Point72 Asset Management, and Matthew Tewksbury’s Stevens Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Goldcorp Inc. (USA) (NYSE:GG) but similarly valued. We will take a look at Grifols SA, Barcelona (NASDAQ:GRFS), Lam Research Corporation (NASDAQ:LRCX), Jarden Corp (NYSE:JAH), and Ameren Corp (NYSE:AEE). This group of stocks’ market valuations are closest to GG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GRFS 14 648378 1
LRCX 45 1043496 -3
JAH 42 1462444 9
AEE 18 459329 0

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $903 million. That figure was $871 million in GG’s case. Lam Research Corporation (NASDAQ:LRCX) is the most popular stock in this table. On the other hand Grifols SA, Barcelona (NASDAQ:GRFS) is the least popular one with only 14 bullish hedge fund positions. Goldcorp Inc. (USA) (NYSE:GG) 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. In this regard LRCX might be a better candidate to consider a long position.

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