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Is Alamos Gold Inc (AGI) A Good Stock To Buy?

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  • AGI

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th. In this article, we look at what those funds think of Alamos Gold Inc (NYSE:AGI) based on that data.

Is AGI a good stock to buy? Alamos Gold Inc (NYSE:AGI) investors should be aware of a decrease in hedge fund sentiment recently. Alamos Gold Inc (NYSE:AGI) was in 20 hedge funds' portfolios at the end of June. The all time high for this statistic is 22. There were 22 hedge funds in our database with AGI positions at the end of the first quarter. Our calculations also showed that AGI isn't among the 30 most popular stocks among hedge funds (click for Q2 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 79 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.

Eric Sprott Sprott Asset Management
Eric Sprott Sprott Asset Management

Eric Sprott of Sprott Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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. Keeping this in mind we're going to take a look at the fresh hedge fund action surrounding Alamos Gold Inc (NYSE:AGI).

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

Heading into the third quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AGI over the last 24 quarters. So, let's see 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 Alamos Gold Inc (NYSE:AGI), which was worth $67.4 million at the end of the second quarter. On the second spot was Sprott Asset Management which amassed $49.5 million worth of shares. Sun Valley Gold, Royce & Associates, and Balyasny Asset Management 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 Sprott Asset Management allocated the biggest weight to Alamos Gold Inc (NYSE:AGI), around 2.89% of its 13F portfolio. Sun Valley Gold is also relatively very bullish on the stock, designating 2.09 percent of its 13F equity portfolio to AGI.

Due to the fact that Alamos Gold Inc (NYSE:AGI) has witnessed a decline in interest from the entirety of the hedge funds we track, it's easy to see that there was a specific group of hedgies that decided to sell off their positions entirely in the second quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital sold off the biggest investment of all the hedgies watched by Insider Monkey, comprising close to $21 million in stock, and Phil Frohlich's Prescott Group Capital Management was right behind this move, as the fund cut about $0.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the second quarter.

Let's go over hedge fund activity in other stocks similar to Alamos Gold Inc (NYSE:AGI). We will take a look at Kennametal Inc. (NYSE:KMT), Hilltop Holdings Inc. (NYSE:HTH), Jumia Technologies AG (NYSE:JMIA), Berkeley Lights, Inc. (NASDAQ:BLI), Calix Inc (NYSE:CALX), Utz Brands Inc (NYSE:UTZ), and PTC Therapeutics, Inc. (NASDAQ:PTCT). This group of stocks' market caps resemble AGI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KMT,18,376031,5 HTH,8,44603,-8 JMIA,14,153915,-2 BLI,15,379480,-1 CALX,23,289870,-8 UTZ,14,76181,1 PTCT,23,262278,-1 Average,16.4,226051,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.4 hedge funds with bullish positions and the average amount invested in these stocks was $226 million. That figure was $222 million in AGI's case. Calix Inc (NYSE:CALX) is the most popular stock in this table. On the other hand Hilltop Holdings Inc. (NYSE:HTH) is the least popular one with only 8 bullish hedge fund positions. Alamos Gold Inc (NYSE:AGI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AGI is 70.3. 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 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on AGI as the stock returned 4.9% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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