Was The Smart Money Right About Barrick Gold (GOLD)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards Barrick Gold Corporation (NYSE:GOLD).

Barrick Gold Corporation (NYSE:GOLD) shareholders have witnessed an increase in hedge fund interest of late. Barrick Gold Corporation (NYSE:GOLD) was in 53 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 54. There were 52 hedge funds in our database with GOLD holdings at the end of September. Our calculations also showed that GOLD isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Kerr Neilson of Platinum Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s take a look at the new hedge fund action surrounding Barrick Gold Corporation (NYSE:GOLD).

Do Hedge Funds Think GOLD Is A Good Stock To Buy Now?

At the end of the fourth quarter, a total of 53 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the third quarter of 2020. By comparison, 51 hedge funds held shares or bullish call options in GOLD a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the most valuable position in Barrick Gold Corporation (NYSE:GOLD). Renaissance Technologies has a $321.9 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $291.7 million position; 0.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions encompass D. E. Shaw’s D E Shaw, Kerr Neilson’s Platinum Asset Management and Richard Oldfield’s Oldfield Partners. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to Barrick Gold Corporation (NYSE:GOLD), around 5.85% of its 13F portfolio. Mountain Lake Investment Management is also relatively very bullish on the stock, designating 4.88 percent of its 13F equity portfolio to GOLD.

Consequently, some big names have been driving this bullishness. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the biggest position in Barrick Gold Corporation (NYSE:GOLD). Two Sigma Advisors had $13.2 million invested in the company at the end of the quarter. Andrew Kurita’s Kettle Hill Capital Management also made a $6.9 million investment in the stock during the quarter. The following funds were also among the new GOLD investors: Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Louis Bacon’s Moore Global Investments, and Jonathan Lourie and Stuart Fiertz’s Cheyne Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Barrick Gold Corporation (NYSE:GOLD) but similarly valued. These stocks are Public Storage (NYSE:PSA), Match Group, Inc. (NASDAQ:MTCH), Rocket Companies, Inc. (NYSE:RKT), TE Connectivity Ltd. (NYSE:TEL), KLA Corporation (NASDAQ:KLAC), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), and L3Harris Technologies, Inc. (NYSE:LHX). All of these stocks’ market caps are similar to GOLD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PSA 31 1038430 14
MTCH 72 3780895 11
RKT 16 222897 -6
TEL 39 2164724 6
KLAC 36 925910 3
ERIC 20 210745 -3
LHX 37 890624 -5
Average 35.9 1319175 2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.9 hedge funds with bullish positions and the average amount invested in these stocks was $1319 million. That figure was $1752 million in GOLD’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand Rocket Companies, Inc. (NYSE:RKT) is the least popular one with only 16 bullish hedge fund positions. Barrick Gold Corporation (NYSE:GOLD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GOLD is 68.5. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and beat the market again by 1.6 percentage points. Unfortunately GOLD wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on GOLD were disappointed as the stock returned -6.3% since the end of December (through 4/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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