Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can't match. So should one consider investing in SSR Mining Inc. (NASDAQ:SSRM)? The smart money sentiment can provide an answer to this question.
SSR Mining Inc. (NASDAQ:SSRM) investors should pay attention to a decrease in support from the world's most elite money managers recently. Our calculations also showed that SSRM isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are numerous tools investors can use to assess publicly traded companies. A pair of the most underrated tools are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can outpace their index-focused peers by a superb margin (see the details here).
[caption id="attachment_758446" align="aligncenter" width="600"] Michael Hintze of CQS Cayman LP[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We're going to view the fresh hedge fund action regarding SSR Mining Inc. (NASDAQ:SSRM).
Hedge fund activity in SSR Mining Inc. (NASDAQ:SSRM)
Heading into the fourth quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in SSRM a year ago. So, let's see 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, Renaissance Technologies has the number one position in SSR Mining Inc. (NASDAQ:SSRM), worth close to $83.1 million, corresponding to 0.1% of its total 13F portfolio. On Renaissance Technologies's heels is Millennium Management, managed by Israel Englander, which holds a $20.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions comprise John Paulson's Paulson & Co, Peter Franklin Palmedo's Sun Valley Gold and Eric Sprott's Sprott Asset Management. In terms of the portfolio weights assigned to each position Sun Valley Gold allocated the biggest weight to SSR Mining Inc. (NASDAQ:SSRM), around 3.56% of its 13F portfolio. Sprott Asset Management is also relatively very bullish on the stock, earmarking 2.07 percent of its 13F equity portfolio to SSRM.
Due to the fact that SSR Mining Inc. (NASDAQ:SSRM) has experienced a decline in interest from the aggregate hedge fund industry, logic holds that there were a few fund managers that elected to cut their positions entirely last quarter. It's worth mentioning that Matthew Hulsizer's PEAK6 Capital Management dropped the largest stake of the 750 funds tracked by Insider Monkey, worth close to $2.8 million in stock, and Paul Marshall and Ian Wace's Marshall Wace was right behind this move, as the fund sold off about $1.7 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds last quarter.
Let's go over hedge fund activity in other stocks similar to SSR Mining Inc. (NASDAQ:SSRM). These stocks are Sally Beauty Holdings, Inc. (NYSE:SBH), Alexander's, Inc. (NYSE:ALX), NMI Holdings Inc (NASDAQ:NMIH), and ServisFirst Bancshares, Inc. (NASDAQ:SFBS). This group of stocks' market caps are closest to SSRM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBH,22,167354,2 ALX,11,98202,7 NMIH,19,224269,0 SFBS,8,11329,-1 Average,15,125289,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $125 million. That figure was $166 million in SSRM's case. Sally Beauty Holdings, Inc. (NYSE:SBH) is the most popular stock in this table. On the other hand ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is the least popular one with only 8 bullish hedge fund positions. SSR Mining Inc. (NASDAQ:SSRM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on SSRM, though not to the same extent, as the stock returned 7.9% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.