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Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards PolyMet Mining Corp. (NYSE:PLM) changed recently.
Is PolyMet Mining Corp. (NYSE:PLM) the right pick for your portfolio? The smart money was becoming hopeful. The number of bullish hedge fund bets went up by 2 recently. PolyMet Mining Corp. (NYSE:PLM) was in 6 hedge funds' portfolios at the end of March. The all time high for this statistic was previously 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PLM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
John Overdeck of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks 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. With all of this in mind let's take a peek at the recent hedge fund action encompassing PolyMet Mining Corp. (NYSE:PLM).
Do Hedge Funds Think PLM Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in PLM a year ago. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in PolyMet Mining Corp. (NYSE:PLM), which was worth $1 million at the end of the fourth quarter. On the second spot was Two Sigma Advisors which amassed $0.5 million worth of shares. Elkhorn Partners, Paloma Partners, and Millennium 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 Elkhorn Partners allocated the biggest weight to PolyMet Mining Corp. (NYSE:PLM), around 0.24% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, earmarking 0.0029 percent of its 13F equity portfolio to PLM.
As aggregate interest increased, specific money managers were breaking ground themselves. Renaissance Technologies, assembled the largest position in PolyMet Mining Corp. (NYSE:PLM). Renaissance Technologies had $1 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0 million position during the quarter.
Let's go over hedge fund activity in other stocks similar to PolyMet Mining Corp. (NYSE:PLM). We will take a look at Arbutus Biopharma Corp (NASDAQ:ABUS), Centrus Energy Corp. (NYSE:LEU), Net 1 UEPS Technologies Inc (NASDAQ:UEPS), iRadimed Corporation (NASDAQ:IRMD), G. Willi-Food International Limited (NASDAQ:WILC), Cheetah Mobile Inc (NYSE:CMCM), and Utah Medical Products, Inc. (NASDAQ:UTMD). This group of stocks' market values resemble PLM's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABUS,15,20046,4 LEU,6,16375,2 UEPS,8,23623,-3 IRMD,3,50698,-2 WILC,2,31828,0 CMCM,4,3156,0 UTMD,4,28627,-2 Average,6,24908,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $2 million in PLM's case. Arbutus Biopharma Corp (NASDAQ:ABUS) is the most popular stock in this table. On the other hand G. Willi-Food International Limited (NASDAQ:WILC) is the least popular one with only 2 bullish hedge fund positions. PolyMet Mining Corp. (NYSE:PLM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PLM is 52.4. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on PLM as the stock returned 21.8% since the end of the first quarter (through 6/25) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.