The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought IAMGOLD Corporation (NYSE:IAG) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
IAMGOLD Corporation (NYSE:IAG) has experienced an increase in hedge fund interest lately. IAMGOLD Corporation (NYSE:IAG) was in 18 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 17 hedge funds in our database with IAG positions at the end of the first quarter. Our calculations also showed that IAG isn't among the 30 most popular stocks among hedge funds (click for Q2 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Eric Sprott of Sprott Asset 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 are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. Keeping this in mind we're going to take a gander at the new hedge fund action encompassing IAMGOLD Corporation (NYSE:IAG).
What have hedge funds been doing with IAMGOLD Corporation (NYSE:IAG)?
At Q2's end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IAG over the last 20 quarters. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in IAMGOLD Corporation (NYSE:IAG), which was worth $91 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $32.9 million worth of shares. Two Sigma Advisors, Paulson & Co, and Moore Global Investments 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 Paulson & Co allocated the biggest weight to IAMGOLD Corporation (NYSE:IAG), around 0.23% of its 13F portfolio. Contrarius Investment Management is also relatively very bullish on the stock, earmarking 0.21 percent of its 13F equity portfolio to IAG.
Now, specific money managers were leading the bulls' herd. Moore Global Investments, managed by Louis Bacon, assembled the most valuable position in IAMGOLD Corporation (NYSE:IAG). Moore Global Investments had $5.6 million invested in the company at the end of the quarter. David Greenspan's Slate Path Capital also initiated a $1.4 million position during the quarter. The other funds with brand new IAG positions are Noam Gottesman's GLG Partners, Michael Gelband's ExodusPoint Capital, and David Andre and Astro Teller's Cerebellum Capital.
Let's go over hedge fund activity in other stocks similar to IAMGOLD Corporation (NYSE:IAG). We will take a look at Brandywine Realty Trust (NYSE:BDN), Myovant Sciences Ltd. (NYSE:MYOV), Chimera Investment Corporation (NYSE:CIM), NetScout Systems, Inc. (NASDAQ:NTCT), Xencor Inc (NASDAQ:XNCR), PriceSmart, Inc. (NASDAQ:PSMT), and Norbord Inc. (NYSE:OSB). This group of stocks' market valuations are closest to IAG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BDN,12,26488,1 MYOV,17,146866,7 CIM,17,122249,0 NTCT,16,113031,4 XNCR,19,265934,6 PSMT,12,38375,1 OSB,11,41064,-1 Average,14.9,107715,2.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $177 million in IAG's case. Xencor Inc (NASDAQ:XNCR) is the most popular stock in this table. On the other hand Norbord Inc. (NYSE:OSB) is the least popular one with only 11 bullish hedge fund positions. IAMGOLD Corporation (NYSE:IAG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IAG is 79.8. 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 positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately IAG wasn't nearly as popular as these 10 stocks and hedge funds that were betting on IAG were disappointed as the stock returned -3% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.