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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Seabridge Gold, Inc. (NYSE:SA) based on that data.
Is SA a good stock to buy now? Seabridge Gold, Inc. (NYSE:SA) has experienced an increase in hedge fund sentiment lately. Seabridge Gold, Inc. (NYSE:SA) was in 10 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 10. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 8 hedge funds in our database with SA holdings at the end of June. Our calculations also showed that SA isn't among the 30 most popular stocks among hedge funds (click for Q3 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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 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.
David Iben of Kopernik Global Investors
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 recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Now let's review the new hedge fund action surrounding Seabridge Gold, Inc. (NYSE:SA).
Do Hedge Funds Think SA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in SA a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Andrew Weiss's Weiss Asset Management has the number one position in Seabridge Gold, Inc. (NYSE:SA), worth close to $24.1 million, corresponding to 1% of its total 13F portfolio. Coming in second is Eric Sprott of Sprott Asset Management, with a $16.8 million position; 0.7% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish consist of John Paulson's Paulson & Co, D. E. Shaw's D E Shaw and David Iben's Kopernik Global Investors. In terms of the portfolio weights assigned to each position Weiss Asset Management allocated the biggest weight to Seabridge Gold, Inc. (NYSE:SA), around 0.98% of its 13F portfolio. Kopernik Global Investors is also relatively very bullish on the stock, setting aside 0.82 percent of its 13F equity portfolio to SA.
As aggregate interest increased, key hedge funds were leading the bulls' herd. Kopernik Global Investors, managed by David Iben, established the most outsized position in Seabridge Gold, Inc. (NYSE:SA). Kopernik Global Investors had $5.3 million invested in the company at the end of the quarter. Fred Knoll's Knoll Capital Management also made a $0.6 million investment in the stock during the quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Seabridge Gold, Inc. (NYSE:SA) but similarly valued. These stocks are CBIZ, Inc. (NYSE:CBZ), ACM Research, Inc. (NASDAQ:ACMR), Columbia Property Trust Inc (NYSE:CXP), Xperi Holding Corporation (NASDAQ:XPER), Retail Properties of America Inc (NYSE:RPAI), CVR Energy, Inc. (NYSE:CVI), and National Research Corporation (NASDAQ:NRC). This group of stocks' market values are similar to SA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CBZ,14,182425,0 ACMR,16,129786,5 CXP,15,47691,-1 XPER,23,96085,1 RPAI,10,38517,-1 CVI,18,937150,0 NRC,6,38451,-1 Average,14.6,210015,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $210 million. That figure was $69 million in SA's case. Xperi Holding Corporation (NASDAQ:XPER) is the most popular stock in this table. On the other hand National Research Corporation (NASDAQ:NRC) is the least popular one with only 6 bullish hedge fund positions. Seabridge Gold, Inc. (NYSE:SA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SA is 48.8. 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 negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately SA wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SA investors were disappointed as the stock returned -1.2% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.