When making investment decisions as private individuals, it is general wisdom to take cues and tips from hedge fund managers and experienced billionaires that have spent years understanding the market and in the process, generated millions or even billions doing so. It usually happens that their pieces of investment wisdom are just as relevant and useful to individual investors and open the door to individuals exploring investment ideas they hitherto hadn’t considered.
Expanding on the above, we take a look into three stocks that hedge funds cannot seem to have enough of recently in the name of Royal Gold (NASDAQ: RDLD), Marathon Petroleum (NYSE: MPC) and Antero Resources (NYSE: AR)- and try to examine why these huge industry players are buying up these stocks fast as well as if they indeed are worthwhile investments for you.
Reuben Gregg Brewer speaking on Royal Gold says that Citadel, Allianz and Calamos have each upped their shareholdings in the company by thousands over the past few months and that any individual worked about elevated stock market valuations should do the same. He further goes on to explain how different the company is from other players in the precious metals industry as unlike other companies that run mines, Royal Gold is a streaming company that gives money to miners in exchange for the right to buy Gold and Silver in the future at a preset, reduced rate. This means that the company enjoys high margins in both the times of boom and economic downturns.
Matt DiLallo speaking on Marathon Petroleum says that since Daniel Loeb, the founder of the hedge fund named Third Point, has managed to achieve a 23.7% annualized return since inception (with his Ultra fund) as measured against the 7.8& annualized return of the S&P 500 over the same time, his investment decisions are at least worth looking into.
He recently acquired stock from oil refiner Marathon Petroleum and the main reason behind this is probably the view that economic growth in the US will be fueled by the new tax reforms, further driving up the demand for gasoline and increasing the refiner’s value.
Finally, Tyler Crowe, speaking on Antero Resources says that Seth Klarman’s Baupost Group steadily builds up its stake in natural gas liquids producer Antero Resources. According to Tyler, one of the things Seth sees in Antero is an impending boom in petrochemical manufacturing anf the exportation of energy from the US.