IAMGOLD Corporation (USA) (NYSE:IAG) investors should be aware of an increase in hedge fund sentiment of late.
According to most market participants, hedge funds are viewed as slow, old financial vehicles of years past. While there are more than 8000 funds in operation at present, we look at the aristocrats of this club, around 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing equity investments, we have brought to light a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as key, optimistic insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are a variety of incentives for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if “monkeys” know what to do (learn more here).
Consequently, we’re going to take a look at the recent action encompassing IAMGOLD Corporation (USA) (NYSE:IAG).
How are hedge funds trading IAMGOLD Corporation (USA) (NYSE:IAG)?
In preparation for this quarter, a total of 20 of the hedge funds we track were long in this stock, a change of 5% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in IAMGOLD Corporation (USA) (NYSE:IAG). First Eagle Investment Management has a $44.2 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Paulson & Co, managed by John Paulson, which held a $27.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Peter Franklin Palmedo’s Sun Valley Gold, Charles de Vaulx’s International Value Advisers and Jim Simons’s Renaissance Technologies.
As aggregate interest increased, some big names have been driving this bullishness. Highfields Capital Management, managed by Jonathon Jacobson, established the most outsized position in IAMGOLD Corporation (USA) (NYSE:IAG). Highfields Capital Management had 7.2 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $2.9 million position during the quarter. The following funds were also among the new IAG investors: Israel Englander’s Millennium Management, Ray Dalio’s Bridgewater Associates, and Cliff Asness’s AQR Capital Management.
How have insiders been trading IAMGOLD Corporation (USA) (NYSE:IAG)?
Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past half-year. Over the latest six-month time period, IAMGOLD Corporation (USA) (NYSE:IAG) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to IAMGOLD Corporation (USA) (NYSE:IAG). These stocks are Allied Nevada Gold Corp. (NYSEAMEX:ANV), AuRico Gold Inc (USA) (NYSE:AUQ), Royal Gold, Inc USA) (NASDAQ:RGLD), New Gold Inc. (USA) (NYSEAMEX:NGD), and Harmony Gold Mining Co. (ADR) (NYSE:HMY). This group of stocks are in the gold industry and their market caps are similar to IAG’s market cap.