Yamana Gold Inc. (AUY): Hedge Funds Are Cashing Out

In this article you are going to find out whether hedge funds think Yamana Gold Inc. (NYSE:AUY) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Yamana Gold Inc. (NYSE:AUY) was in 14 hedge funds’ portfolios at the end of the first quarter of 2020. AUY investors should be aware of a decrease in activity from the world’s largest hedge funds recently. There were 16 hedge funds in our database with AUY positions at the end of the previous quarter. Our calculations also showed that AUY 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.

At the moment there are a large number of formulas market participants have at their disposal to grade their holdings. A duo of the less utilized formulas are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the S&P 500 by a solid amount (see the details here).


Lee Ainslie of Maverick Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the 10 stocks that went up during the 2008 crash to identify the companies that are likely to deliver double digit returns in up and down markets. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s review the recent hedge fund action surrounding Yamana Gold Inc. (NYSE:AUY).

How are hedge funds trading Yamana Gold Inc. (NYSE:AUY)?

At Q1’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AUY over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is AUY A Good Stock To Buy?

The largest stake in Yamana Gold Inc. (NYSE:AUY) was held by Renaissance Technologies, which reported holding $126.8 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $34.8 million position. Other investors bullish on the company included Two Sigma Advisors, Citadel Investment Group, and Adage Capital Management. In terms of the portfolio weights assigned to each position Gotham Asset Management allocated the biggest weight to Yamana Gold Inc. (NYSE:AUY), around 0.13% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.12 percent of its 13F equity portfolio to AUY.

Due to the fact that Yamana Gold Inc. (NYSE:AUY) has experienced a decline in interest from hedge fund managers, logic holds that there was a specific group of funds that slashed their positions entirely by the end of the first quarter. It’s worth mentioning that D. E. Shaw’s D E Shaw cut the biggest position of the 750 funds monitored by Insider Monkey, valued at close to $3.6 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also dumped its stock, about $1.3 million worth. These moves are important to note, as aggregate hedge fund interest fell by 2 funds by the end of the first quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Yamana Gold Inc. (NYSE:AUY) but similarly valued. We will take a look at Power Integrations Inc (NASDAQ:POWI), The Gap Inc. (NYSE:GPS), Kirby Corporation (NYSE:KEX), and The Brink’s Company (NYSE:BCO). All of these stocks’ market caps are closest to AUY’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
POWI 21 76700 4
GPS 24 48879 -7
KEX 21 288290 -5
BCO 24 275433 0
Average 22.5 172326 -2

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $212 million in AUY’s case. The Gap Inc. (NYSE:GPS) is the most popular stock in this table. On the other hand Power Integrations Inc (NASDAQ:POWI) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Yamana Gold Inc. (NYSE:AUY) is even less popular than POWI. Hedge funds clearly dropped the ball on AUY as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. A small number of hedge funds were also right about betting on AUY as the stock returned 88% so far in 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.