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Hedge Funds Have Never Been This Bullish On B2Gold Corp (BTG)

Asma UL Husna

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards B2Gold Corp (NYSE:BTG).

Is B2Gold Corp (NYSE:BTG) an exceptional investment now? The best stock pickers are betting on the stock. The number of long hedge fund positions rose by 2 lately. Our calculations also showed that BTG 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). BTG was in 19 hedge funds' portfolios at the end of the first quarter of 2020. There were 17 hedge funds in our database with BTG holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.

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. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

[caption id="attachment_673876" align="aligncenter" width="392"] John Overdeck of Two Sigma Advisors[/caption]

John Overdeck of Two Sigma

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's review the recent hedge fund action encompassing B2Gold Corp (NYSE:BTG).

What have hedge funds been doing with B2Gold Corp (NYSE:BTG)?

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the fourth quarter of 2019. On the other hand, there were a total of 16 hedge funds with a bullish position in BTG a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in B2Gold Corp (NYSE:BTG) was held by Renaissance Technologies, which reported holding $135 million worth of stock at the end of September. It was followed by GLG Partners with a $32.1 million position. Other investors bullish on the company included Two Sigma Advisors, Sun Valley Gold, and Sprott Asset Management. In terms of the portfolio weights assigned to each position Prince Street Capital Management allocated the biggest weight to B2Gold Corp (NYSE:BTG), around 1.1% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, designating 1 percent of its 13F equity portfolio to BTG.

As industrywide interest jumped, some big names have jumped into B2Gold Corp (NYSE:BTG) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the biggest position in B2Gold Corp (NYSE:BTG). Marshall Wace LLP had $0.5 million invested in the company at the end of the quarter. Ronald Hua's Qtron Investments also made a $0.1 million investment in the stock during the quarter. The other funds with brand new BTG positions are Gavin Saitowitz and Cisco J. del Valle's Springbok Capital, Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, and Karim Abbadi and Edward McBride's Centiva Capital.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as B2Gold Corp (NYSE:BTG) but similarly valued. These stocks are Nektar Therapeutics (NASDAQ:NKTR), Balchem Corporation (NASDAQ:BCPC), Sibanye Stillwater Limited (NYSE:SBSW), and Blueprint Medicines Corporation (NASDAQ:BPMC). This group of stocks' market values are closest to BTG's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NKTR,17,198202,-9 BCPC,13,56015,1 SBSW,19,83948,6 BPMC,36,762086,-1 Average,21.25,275063,-0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $275 million. That figure was $229 million in BTG's case. Blueprint Medicines Corporation (NASDAQ:BPMC) is the most popular stock in this table. On the other hand Balchem Corporation (NASDAQ:BCPC) is the least popular one with only 13 bullish hedge fund positions. B2Gold Corp (NYSE:BTG) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on BTG as the stock returned 74.5% during 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.

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