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International Tower Hill Mines Ltd (THM) Fell Out Of Favor With Hedge Funds

·6 min read

In this article we will analyze whether International Tower Hill Mines Ltd (NYSE:THM) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is International Tower Hill Mines Ltd (NYSE:THM) a sound investment now? The best stock pickers were taking a pessimistic view. The number of long hedge fund bets went down by 1 lately. International Tower Hill Mines Ltd (NYSE:THM) was in 4 hedge funds' portfolios at the end of March. The all time high for this statistic is 5. Our calculations also showed that THM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 5 hedge funds in our database with THM holdings at the end of December.

According to most stock holders, hedge funds are perceived as slow, outdated investment tools of yesteryear. While there are greater than 8000 funds trading today, Our researchers look at the top tier of this club, about 850 funds. It is estimated that this group of investors shepherd the majority of all hedge funds' total asset base, and by keeping an eye on their first-class stock picks, Insider Monkey has deciphered numerous investment strategies that have historically outpaced the market. Insider Monkey's flagship short hedge fund strategy outperformed 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 .

David Iben of Kopernik Global Investors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $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. Keeping this in mind we're going to take a peek at the fresh hedge fund action encompassing International Tower Hill Mines Ltd (NYSE:THM).

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

At the end of March, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in THM 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.

According to Insider Monkey's hedge fund database, John Paulson's Paulson & Co has the most valuable position in International Tower Hill Mines Ltd (NYSE:THM), worth close to $66.3 million, amounting to 1.5% of its total 13F portfolio. Sitting at the No. 2 spot is Eric Sprott of Sprott Asset Management, with a $30.8 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism consist of David Iben's Kopernik Global Investors, Renaissance Technologies and . In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to International Tower Hill Mines Ltd (NYSE:THM), around 1.85% of its 13F portfolio. Paulson & Co is also relatively very bullish on the stock, earmarking 1.52 percent of its 13F equity portfolio to THM.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified THM as a viable investment and initiated a position in the stock.

Let's now take a look at hedge fund activity in other stocks similar to International Tower Hill Mines Ltd (NYSE:THM). We will take a look at Savara, Inc. (NASDAQ:SVRA), Equillium, Inc. (NASDAQ:EQ), Identiv, Inc. (NASDAQ:INVE), Silvercrest Asset Management Group Inc (NASDAQ:SAMG), Medicenna Therapeutics Corp. (NASDAQ:MDNA), PLx Pharma Inc. (NASDAQ:PLXP), and Kindred Biosciences Inc (NASDAQ:KIN). This group of stocks' market values resemble THM's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SVRA,10,29388,3 EQ,7,17138,2 INVE,7,28771,0 SAMG,4,15171,0 MDNA,5,5019,2 PLXP,9,40775,5 KIN,11,72319,1 Average,7.6,29797,1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.6 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $109 million in THM's case. Kindred Biosciences Inc (NASDAQ:KIN) is the most popular stock in this table. On the other hand Silvercrest Asset Management Group Inc (NASDAQ:SAMG) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks International Tower Hill Mines Ltd (NYSE:THM) is even less popular than SAMG. Our overall hedge fund sentiment score for THM is 28. 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. Hedge funds dodged a bullet by taking a bearish stance towards THM. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th but managed to beat the market again by 3.3 percentage points. Unfortunately THM wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); THM investors were disappointed as the stock returned -0.9% since the end of the first quarter (through 6/11) 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 since 2019.

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

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