Were Hedge Funds Right About Coeur Mining, Inc. (CDE)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Coeur Mining, Inc. (NYSE:CDE).

Coeur Mining, Inc. (NYSE:CDE) shareholders have witnessed an increase in enthusiasm from smart money of late. Coeur Mining, Inc. (NYSE:CDE) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic is 26. Our calculations also showed that CDE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Noam Gottesman GLG Partners

Noam Gottesman of GLG Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 we’re going to analyze the new hedge fund action regarding Coeur Mining, Inc. (NYSE:CDE).

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

At the end of March, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in CDE a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Is CDE A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Eric Sprott’s Sprott Asset Management has the most valuable position in Coeur Mining, Inc. (NYSE:CDE), worth close to $10.8 million, accounting for 0.6% of its total 13F portfolio. The second largest stake is held by D E Shaw, led by D. E. Shaw, holding a $8.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions comprise John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and Suzi Nutton (CEO)’s Lansdowne Partners. In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to Coeur Mining, Inc. (NYSE:CDE), around 0.65% of its 13F portfolio. Manatuck Hill Partners is also relatively very bullish on the stock, setting aside 0.15 percent of its 13F equity portfolio to CDE.

As aggregate interest increased, key hedge funds were breaking ground themselves. Lansdowne Partners, managed by Suzi Nutton (CEO), established the most outsized position in Coeur Mining, Inc. (NYSE:CDE). Lansdowne Partners had $4.6 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $1.2 million position during the quarter. The other funds with brand new CDE positions are Noam Gottesman’s GLG Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Qing Li’s Sciencast Management.

Let’s now review hedge fund activity in other stocks similar to Coeur Mining, Inc. (NYSE:CDE). These stocks are Prestige Consumer Healthcare Inc. (NYSE:PBH), Verra Mobility Corporation (NASDAQ:VRRM), Mednax Inc. (NYSE:MD), Cloopen Group Holding Limited (NYSE:RAAS), Transocean Ltd (NYSE:RIG), Rambus Inc. (NASDAQ:RMBS), and DiamondRock Hospitality Company (NYSE:DRH). This group of stocks’ market valuations are closest to CDE’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PBH 14 104765 0
VRRM 18 337812 -4
MD 11 260855 -7
RAAS 14 36938 14
RIG 20 148582 3
RMBS 23 294753 0
DRH 11 118667 -2
Average 15.9 186053 0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $186 million. That figure was $46 million in CDE’s case. Rambus Inc. (NASDAQ:RMBS) is the most popular stock in this table. On the other hand Mednax Inc. (NYSE:MD) is the least popular one with only 11 bullish hedge fund positions. Coeur Mining, Inc. (NYSE:CDE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CDE is 55.9. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately CDE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CDE were disappointed as the stock returned -18.8% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 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.