Legendary fund managers or gurus such as Warren Buffet, George Soros, Carl Icahn, Steven Cohen and Mario Gabelli, are well-known for their savvy in picking winning stocks year after year. Generally, their investment horizon and holding periods stretches into many quarters and years, sometimes even decades. In this article, we examine based on our research of their latest available Q3 institutional 13-F filings the large-gold gold mining companies that they are most bullish and bearish about.
Most of the information is based on the latest available Q3 filings, but we have updated our data with Q4 filings from guru fund manager Yacktman Asset Management that filed earlier this month. Taken together, these guru managers were bearish on the gold mining group in general, cutting a net $301 million in Q3 from their $5.87 billion prior quarter holdings in the group.
The following are the large-cap gold miners that guru fund managers are bullish about (see Table):
Barrick Gold Corporation (NYSE:ABX): ABX is a Canadian company engaged in production of gold and copper in Peru, Canada, U.S., Australia, Chile, and five other countries. Guru funds added a net $93 million to their $483 million prior quarter position. The top buyers were Greenlight Capital ($65 million) and Zweig-DiMenna Associates ($48 million), and the top holders were First Eagle Investment Management ($139 million), Platinum Investment Management ($132 million) and Third Point LLC ($110 million). ABX was in the news today, announcing its exit from one of the world's most promising and toughest gold frontiers, the Russian market, by selling its 20.4% stake in struggling Russian miner Highland Gold. Like many gold plays, the stock has been through a multi-year rise and currently trades within striking range of its all-time highs, at 8-9 forward P/E and 2.2 P/B compared to averages of 11.6 and 3.6 for its peers in the gold mining group, while earnings are projected to increase from $3.33 in 2010 to $5.64 in 2012, at an annualized growth rate of 30.3%.
Anglogold Ashanti Ads (NYSE:AU): AU is a South African gold producer with 20 operations in ten countries on four continents. It also produces silver, uranium oxide, and sulfuric acid. Guru funds added a net $17 million to their $271 million prior quarter position. The top buyer was First Eagle Investment Management ($15 million), and the top holders were First Eagle ($174 million) and Platinum Investment Management ($112 million). AU trades at a forward 8 P/E and 18 P/B compared to averages of 11.6 and 3.6 for its peers in the gold mining group, while earnings are projected to increase from $4.68 in 2011 to $5.67 in 2012.
Ivanhoe Mines Ltd. (IVN): IVN is a Canadian company engaged primarily in the exploration of gold and copper mines in central Asia and the Asian Pacific region. Guru funds together added a minor net $1 million to their $230 million prior quarter position. The top guru fund holders were York Capital Management Global Advisors ($153 million) and Blue Ridge Capital Holdings ($42 million). IVN has historically incurred losses, so P/E is irrelevant; however, it trades at a 2.5 P/B ratio compared to the 3.6 average for the group.
Gold Fields Ltd. (NYSE:GFI): GFI is a South African mining company engaged in the exploration and extraction of gold in South Africa, Ghana, Australia and Peru. Mega funds cut a minor net $6 million from their $681 million prior quarter position, and together they hold an outsized 5.7% of the outstanding shares compared to their 2.0% weighting in the group. The top guru fund holder by far was First Eagle Investment Management, which holds a $664 million stake in the company. GFI trades at a discount 7-8 forward P/E and 2.1 P/B compared to averages of 11.6 and 3.6 for its peers in the gold mining group, while earnings are projected to increase from $1.59 in 2011 to $2.25 in 2012.
The following are select large-cap gold miners that these guru fund managers are most bearish about (see Table):
- Freeport McMoran Copper & Gold (NYSE:FCX), engaged in the exploration and development of copper, gold, silver and molybdenum mines in Indonesia, North and South America, in which guru funds cut a net $202 million from their $620 million prior quarter position;
- Newmont Mining Corp. (NYSE:NEM), a producer of gold in the U.S., Australia, Peru, Indonesia, Canada, New Zealand, Ghana and Mexico, in which guru funds cut a net $113 million from their $652 million prior quarter position;
- Yamana Gold Inc. (NYSE:AUY), a Canadian company engaged in the exploration and development of gold properties in South America and Mexico, in which guru funds cut a net $33 million from their $188 million prior quarter position;
- Goldcorp Inc. (NYSE:GG), a Canadian company engaged in mining and exploration of silver, copper and gold throughout North and South America, in which guru funds cut a net $32 million from their $414 million prior quarter position;
- Kinross Gold Corp. (NYSE:KGC), engaged in mining and processing gold, silver, and copper in the U.S., Brazil, Ecuador, Chile and Russia, in which guru funds cut a net $7 million from their $154 million prior quarter position; and
- Eldorado Gold Corp. (NYSE:EGO), a Canadian company acquiring, exploring and producing gold and mineral properties in Turkey, China, Brazil and Greece, in which guru funds cut a net $6 million from their $37 million prior quarter position.
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Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.