In this article we will check out the progression of hedge fund sentiment towards McEwen Mining Inc (NYSE:MUX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is McEwen Mining Inc (NYSE:MUX) a healthy stock for your portfolio? Hedge funds were becoming less hopeful. The number of bullish hedge fund bets fell by 5 in recent months. McEwen Mining Inc (NYSE:MUX) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 12. Our calculations also showed that MUX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 10 hedge funds in our database with MUX holdings at the end of December.
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John Overdeck of Two Sigma Advisors
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Do Hedge Funds Think MUX Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -50% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in MUX a year ago. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Weiss Asset Management, managed by Andrew Weiss, holds the most valuable position in McEwen Mining Inc (NYSE:MUX). Weiss Asset Management has a $16.1 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is John Overdeck and David Siegel of Two Sigma Advisors, with a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism contain Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Weiss Asset Management allocated the biggest weight to McEwen Mining Inc (NYSE:MUX), around 0.44% of its 13F portfolio. Heathbridge Capital Management is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to MUX.
Due to the fact that McEwen Mining Inc (NYSE:MUX) has witnessed bearish sentiment from the smart money, we can see that there was a specific group of funds that decided to sell off their positions entirely in the first quarter. At the top of the heap, Eric Sprott's Sprott Asset Management said goodbye to the biggest position of the "upper crust" of funds watched by Insider Monkey, totaling an estimated $1.1 million in stock. Orkun Kilic's fund, Berry Street Capital, also cut its stock, about $1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 5 funds in the first quarter.
Let's now review hedge fund activity in other stocks – not necessarily in the same industry as McEwen Mining Inc (NYSE:MUX) but similarly valued. We will take a look at Gamida Cell Ltd. (NASDAQ:GMDA), Akouos, Inc. (NASDAQ:AKUS), Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), AquaBounty Technologies, Inc. (NASDAQ:AQB), Homology Medicines, Inc. (NASDAQ:FIXX), Nautilus, Inc. (NYSE:NLS), and Plymouth Industrial REIT, Inc. (NYSE:PLYM). All of these stocks' market caps are similar to MUX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GMDA,14,73639,0 AKUS,9,94380,-2 SPPI,8,47544,-1 AQB,10,61518,5 FIXX,7,11553,0 NLS,20,45869,0 PLYM,8,25611,-3 Average,10.9,51445,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $19 million in MUX's case. Nautilus, Inc. (NYSE:NLS) is the most popular stock in this table. On the other hand Homology Medicines, Inc. (NASDAQ:FIXX) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks McEwen Mining Inc (NYSE:MUX) is even less popular than FIXX. Our overall hedge fund sentiment score for MUX is 12.5. 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 clearly dropped the ball on MUX as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on MUX as the stock returned 36.5% since Q1 (through June 18th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.