The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Almaden Minerals Ltd. (NYSE:AAU) based on those filings.
Hedge fund interest in Almaden Minerals Ltd. (NYSE:AAU) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that AAU isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare AAU to other stocks including Luokung Technology Corp (NASDAQ:LKCO), The New Home Company Inc (NYSE:NWHM), and Siebert Financial Corp. (NASDAQ:SIEB) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. Keeping this in mind we’re going to review the new hedge fund action regarding Almaden Minerals Ltd. (NYSE:AAU).
What have hedge funds been doing with Almaden Minerals Ltd. (NYSE:AAU)?
At Q3’s end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AAU over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Almaden Minerals Ltd. (NYSE:AAU) was held by Sprott Asset Management, which reported holding $3.4 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $0.3 million position. The only other hedge fund that is bullish on the company was Citadel Investment Group.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks similar to Almaden Minerals Ltd. (NYSE:AAU). We will take a look at Luokung Technology Corp (NASDAQ:LKCO), The New Home Company Inc (NYSE:NWHM), Siebert Financial Corp. (NASDAQ:SIEB), Ohio Valley Banc Corp. (NASDAQ:OVBC), Landmark Bancorp, Inc. (NASDAQ:LARK), Meridian Corporation (NASDAQ:MRBK), and Delta Apparel, Inc. (NYSE:DLA). This group of stocks’ market caps are closest to AAU’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.3 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $4 million in AAU’s case. Delta Apparel, Inc. (NYSE:DLA) is the most popular stock in this table. On the other hand Luokung Technology Corp (NASDAQ:LKCO) is the least popular one with only 1 bullish hedge fund positions. Almaden Minerals Ltd. (NYSE:AAU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AAU is 49.3. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on AAU as the stock returned 22.9% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.