We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 835 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about B2Gold Corp (NYSE:BTG) in this article.
B2Gold Corp (NYSE:BTG) was in 17 hedge funds' portfolios at the end of December. BTG investors should be aware of an increase in activity from the world's largest hedge funds in recent months. There were 14 hedge funds in our database with BTG holdings at the end of the previous quarter. Our calculations also showed that BTG isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by more than 41 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 35.3% through March 3rd. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_673972" align="aligncenter" width="400"] Blair Levinsky of Waratah Capital Advisors[/caption]
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic's significance before most investors. Keeping this in mind we're going to take a look at the latest hedge fund action surrounding B2Gold Corp (NYSE:BTG).
What does smart money think about B2Gold Corp (NYSE:BTG)?
At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in BTG a year ago. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of B2Gold Corp (NYSE:BTG), with a stake worth $140.2 million reported as of the end of September. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $46.3 million. Two Sigma Advisors, Sprott Asset Management, and Millennium Management 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 Sprott Asset Management allocated the biggest weight to B2Gold Corp (NYSE:BTG), around 2.25% of its 13F portfolio. Sun Valley Gold is also relatively very bullish on the stock, designating 0.37 percent of its 13F equity portfolio to BTG.
Consequently, specific money managers have jumped into B2Gold Corp (NYSE:BTG) headfirst. Sun Valley Gold, managed by Peter Franklin Palmedo, created the most outsized position in B2Gold Corp (NYSE:BTG). Sun Valley Gold had $5.2 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky's Waratah Capital Advisors also initiated a $0.4 million position during the quarter. The other funds with brand new BTG positions are Donald Sussman's Paloma Partners, David Halpert's Prince Street Capital Management, and Michael Gelband's ExodusPoint Capital.
Let's also examine hedge fund activity in other stocks similar to B2Gold Corp (NYSE:BTG). We will take a look at Thor Industries, Inc. (NYSE:THO), Murphy Oil Corporation (NYSE:MUR), Parsons Corporation (NYSE:PSN), and Univar Inc (NYSE:UNVR). This group of stocks' market caps are closest to BTG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position THO,30,247356,0 MUR,24,161932,6 PSN,10,94767,-3 UNVR,43,1536284,5 Average,26.75,510085,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $510 million. That figure was $243 million in BTG's case. Univar Inc (NYSE:UNVR) is the most popular stock in this table. On the other hand Parsons Corporation (NYSE:PSN) is the least popular one with only 10 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on BTG as the stock returned -9% during the same time period and outperformed the market by an even larger margin. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
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