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Hedge Funds Are Dumping Agnico Eagle Mines Limited (AEM)

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With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Agnico Eagle Mines Limited (NYSE:AEM).

Agnico Eagle Mines Limited (NYSE:AEM) has seen a decrease in hedge fund sentiment in recent months. Agnico Eagle Mines Limited (NYSE:AEM) was in 28 hedge funds' portfolios at the end of March. The all time high for this statistic is 36. There were 36 hedge funds in our database with AEM holdings at the end of December. Our calculations also showed that AEM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

According to most traders, hedge funds are seen as underperforming, old investment tools of the past. While there are over 8000 funds trading today, We look at the elite of this club, around 850 funds. These money managers command most of the hedge fund industry's total asset base, and by tailing their best equity investments, Insider Monkey has formulated various investment strategies that have historically defeated Mr. Market. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Billionaire David Siegel's Top 10 Stock Picks
Billionaire David Siegel's Top 10 Stock Picks

David Siegel of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. 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. Keeping this in mind we're going to take a look at the recent hedge fund action regarding Agnico Eagle Mines Limited (NYSE:AEM).

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

At the end of March, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AEM over the last 23 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is AEM A Good Stock To Buy?
Is AEM A Good Stock To Buy?

The largest stake in Agnico Eagle Mines Limited (NYSE:AEM) was held by Renaissance Technologies, which reported holding $129.9 million worth of stock at the end of December. It was followed by Sprott Asset Management with a $37.1 million position. Other investors bullish on the company included Citadel Investment Group, D E Shaw, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to Agnico Eagle Mines Limited (NYSE:AEM), around 2.22% of its 13F portfolio. Southport Management is also relatively very bullish on the stock, setting aside 2.14 percent of its 13F equity portfolio to AEM.

Seeing as Agnico Eagle Mines Limited (NYSE:AEM) has faced declining sentiment from the aggregate hedge fund industry, it's easy to see that there lies a certain "tier" of fund managers that elected to cut their positions entirely heading into Q2. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital said goodbye to the biggest investment of the 750 funds watched by Insider Monkey, worth close to $74.4 million in stock. Hugh Sloane's fund, Sloane Robinson Investment Management, also cut its stock, about $15.2 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 8 funds heading into Q2.

Let's go over hedge fund activity in other stocks similar to Agnico Eagle Mines Limited (NYSE:AEM). We will take a look at DENTSPLY SIRONA Inc. (NASDAQ:XRAY), Sociedad Quimica y Minera (NYSE:SQM), Howmet Aerospace Inc. (NYSE:HWM), Elanco Animal Health Incorporated (NYSE:ELAN), Pool Corporation (NASDAQ:POOL), PulteGroup, Inc. (NYSE:PHM), and The J.M. Smucker Company (NYSE:SJM). This group of stocks' market caps are similar to AEM's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XRAY,26,1218918,-2 SQM,16,142465,2 HWM,51,3959776,2 ELAN,42,1710158,-1 POOL,41,1014649,8 PHM,42,1050252,2 SJM,33,689844,-1 Average,35.9,1398009,1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.9 hedge funds with bullish positions and the average amount invested in these stocks was $1398 million. That figure was $247 million in AEM's case. Howmet Aerospace Inc. (NYSE:HWM) is the most popular stock in this table. On the other hand Sociedad Quimica y Minera (NYSE:SQM) is the least popular one with only 16 bullish hedge fund positions. Agnico Eagle Mines Limited (NYSE:AEM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AEM is 37.5. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 July 9th and surpassed the market again by 6.7 percentage points. Unfortunately AEM wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AEM investors were disappointed as the stock returned 6.9% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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