Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) investors should pay attention to an increase in support from the world’s most elite money managers lately.
In the eyes of most investors, hedge funds are seen as unimportant, outdated investment vehicles of the past. While there are greater than 8000 funds in operation today, we at Insider Monkey hone in on the upper echelon of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by paying attention to their top investments, we have unsheathed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as key, optimistic insider trading activity is another way to parse down the world of equities. Obviously, there are many motivations for an executive to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if investors know where to look (learn more here).
Consequently, let’s take a look at the key action surrounding Randgold Resources Ltd. (ADR) (NASDAQ:GOLD).
What does the smart money think about Randgold Resources Ltd. (ADR) (NASDAQ:GOLD)?
In preparation for this year, a total of 12 of the hedge funds we track were long in this stock, a change of 20% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly.
Of the funds we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Randgold Resources Ltd. (ADR) (NASDAQ:GOLD). First Eagle Investment Management has a $126 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is Paulson & Co, managed by John Paulson, which held a $92 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other peers that are bullish include Jim Simons’s Renaissance Technologies, Israel Englander’s Millennium Management and Chuck Royce’s Royce & Associates.
Consequently, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, established the most valuable position in Randgold Resources Ltd. (ADR) (NASDAQ:GOLD). Millennium Management had 13 million invested in the company at the end of the quarter. Trey Reik’s Bristol Investment Partners also made a $10 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Ken Griffin’s Citadel Investment Group, and Sander Gerber’s Hudson Bay Capital Management.
What do corporate executives and insiders think about Randgold Resources Ltd. (ADR) (NASDAQ:GOLD)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time frame, Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Randgold Resources Ltd. (ADR) (NASDAQ:GOLD). These stocks are Eldorado Gold Corp (USA) (NYSE:EGO), Kinross Gold Corporation (USA) (NYSE:KGC), AngloGold Ashanti Limited (ADR) (NYSE:AU), Agnico-Eagle Mines Limited (USA) (NYSE:AEM), and Compania de Minas Buenaventura SA (ADR) (NYSE:BVN). This group of stocks are in the gold industry and their market caps are closest to GOLD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Eldorado Gold Corp (USA) (NYSE:EGO) | 17 | 0 | 0 |
| Kinross Gold Corporation (USA) (NYSE:KGC) | 27 | 0 | 0 |
| AngloGold Ashanti Limited (ADR) (NYSE:AU) | 23 | 0 | 0 |
| Agnico-Eagle Mines Limited (USA) (NYSE:AEM) | 20 | 0 | 0 |
| Compania de Minas Buenaventura SA (ADR) (NYSE:BVN) | 6 | 0 | 0 |
With the results exhibited by our studies, retail investors should always watch hedge fund and insider trading sentiment, and Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) shareholders fit into this picture quite nicely.
