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Were Hedge Funds Right About Gold Fields Limited (GFI)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtGold Fields Limited (NYSE:GFI) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

Gold Fields Limited (NYSE:GFI) has experienced an increase in activity from the world’s largest hedge funds recently. GFI was in 22 hedge funds’ portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with GFI holdings at the end of the previous quarter. Our calculations also showed that GFI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Lee Ainslie MAVERICK CAPITAL

Lee Ainslie of Maverick Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, on one site we found out that NBA champion Isiah Thomas is now the CEO of this cannabis company. The same site also talks about a snack manufacturer that’s growing at 30% annually. 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. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. Now let’s take a glance at the latest hedge fund action encompassing Gold Fields Limited (NYSE:GFI).

What does smart money think about Gold Fields Limited (NYSE:GFI)?

At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in GFI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in Gold Fields Limited (NYSE:GFI), which was worth $97.3 million at the end of the third quarter. On the second spot was Sprott Asset Management which amassed $51.6 million worth of shares. Arrowstreet Capital, AQR Capital Management, and GLG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Anchor Bolt Capital allocated the biggest weight to Gold Fields Limited (NYSE:GFI), around 11.84% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, dishing out 4.73 percent of its 13F equity portfolio to GFI.

As one would reasonably expect, key hedge funds were leading the bulls’ herd. Tudor Investment Corp, managed by Paul Tudor Jones, established the largest position in Gold Fields Limited (NYSE:GFI). Tudor Investment Corp had $0.9 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.8 million investment in the stock during the quarter. The following funds were also among the new GFI investors: Lee Ainslie’s Maverick Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks similar to Gold Fields Limited (NYSE:GFI). These stocks are Comerica Incorporated (NYSE:CMA), Beyond Meat, Inc. (NASDAQ:BYND), Syneos Health, Inc. (NASDAQ:SYNH), and The Mosaic Company (NYSE:MOS). This group of stocks’ market caps match GFI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CMA 33 255146 -3
BYND 13 91343 -6
SYNH 22 132485 2
MOS 29 386708 0
Average 24.25 216421 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $216 million. That figure was $245 million in GFI’s case. Comerica Incorporated (NYSE:CMA) is the most popular stock in this table. On the other hand Beyond Meat, Inc. (NASDAQ:BYND) is the least popular one with only 13 bullish hedge fund positions. Gold Fields Limited (NYSE:GFI) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on GFI as the stock returned 97.9% during the second quarter and outperformed the market by an even larger margin.

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