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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of HudBay Minerals Inc (NYSE:HBM).
Is HBM a good stock to buy now? HudBay Minerals Inc (NYSE:HBM) investors should be aware of an increase in hedge fund interest of late. HudBay Minerals Inc (NYSE:HBM) was in 13 hedge funds' portfolios at the end of September. The all time high for this statistic is 17. There were 11 hedge funds in our database with HBM holdings at the end of June. Our calculations also showed that HBM 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most investors, hedge funds are seen as worthless, old investment vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, Our experts look at the bigwigs of this group, approximately 850 funds. It is estimated that this group of investors orchestrate the lion's share of all hedge funds' total asset base, and by observing their top equity investments, Insider Monkey has deciphered a number of investment strategies that have historically outrun the broader indices. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Robert Richards of Heathbridge Capital Management
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 15 best blue chip stocks 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. Now let's check out the new hedge fund action surrounding HudBay Minerals Inc (NYSE:HBM).
Do Hedge Funds Think HBM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HBM over the last 21 quarters. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in HudBay Minerals Inc (NYSE:HBM) was held by GMT Capital, which reported holding $182.8 million worth of stock at the end of September. It was followed by Heathbridge Capital Management with a $31.4 million position. Other investors bullish on the company included Renaissance Technologies, Arrowstreet Capital, and Encompass Capital Advisors. In terms of the portfolio weights assigned to each position GMT Capital allocated the biggest weight to HudBay Minerals Inc (NYSE:HBM), around 13.3% of its 13F portfolio. Heathbridge Capital Management is also relatively very bullish on the stock, designating 12.27 percent of its 13F equity portfolio to HBM.
As aggregate interest increased, specific money managers have jumped into HudBay Minerals Inc (NYSE:HBM) headfirst. Encompass Capital Advisors, managed by Todd J. Kantor, assembled the largest position in HudBay Minerals Inc (NYSE:HBM). Encompass Capital Advisors had $9 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital) and Michael Gelband's ExodusPoint Capital.
Let's now review hedge fund activity in other stocks similar to HudBay Minerals Inc (NYSE:HBM). We will take a look at Independence Realty Trust Inc (NYSE:IRT), Harsco Corporation (NYSE:HSC), Supernus Pharmaceuticals Inc (NASDAQ:SUPN), Griffon Corporation (NYSE:GFF), NGM Biopharmaceuticals, Inc. (NASDAQ:NGM), Calix Inc (NYSE:CALX), and Getty Realty Corp. (NYSE:GTY). This group of stocks' market valuations are closest to HBM's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IRT,9,67406,1 HSC,13,41442,-2 SUPN,19,150824,0 GFF,24,181124,15 NGM,12,84327,0 CALX,24,192934,7 GTY,12,64547,5 Average,16.1,111801,3.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $112 million. That figure was $280 million in HBM's case. Griffon Corporation (NYSE:GFF) is the most popular stock in this table. On the other hand Independence Realty Trust Inc (NYSE:IRT) is the least popular one with only 9 bullish hedge fund positions. HudBay Minerals Inc (NYSE:HBM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HBM is 43.3. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on HBM as the stock returned 61.7% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.