Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of General Motors Company (NYSE:GM).
General Motors Company (NYSE:GM) investors should be aware of a decrease in hedge fund interest of late. General Motors Company (NYSE:GM) was in 77 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 88. There were 86 hedge funds in our database with GM holdings at the end of June. Our calculations also showed that GM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a look at the key hedge fund action regarding General Motors Company (NYSE:GM).
Frank Brosens of Taconic Capital
Do Hedge Funds Think GM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 77 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in GM over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in General Motors Company (NYSE:GM) was held by Berkshire Hathaway, which reported holding $3162.6 million worth of stock at the end of September. It was followed by Eagle Capital Management with a $614.8 million position. Other investors bullish on the company included Greenhaven Associates, Citadel Investment Group, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Greenhaven Associates allocated the biggest weight to General Motors Company (NYSE:GM), around 18.26% of its 13F portfolio. SAYA Management is also relatively very bullish on the stock, dishing out 8.77 percent of its 13F equity portfolio to GM.
Because General Motors Company (NYSE:GM) has experienced a decline in interest from the smart money, it’s safe to say that there were a few funds who sold off their entire stakes by the end of the third quarter. At the top of the heap, Matthew Stadelman’s Diamond Hill Capital dropped the largest investment of all the hedgies monitored by Insider Monkey, totaling close to $506.2 million in stock. Jeffrey Altman’s fund, Owl Creek Asset Management, also dumped its stock, about $86.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 9 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as General Motors Company (NYSE:GM) but similarly valued. These stocks are Fidelity National Information Services Inc. (NYSE:FIS), Duke Energy Corporation (NYSE:DUK), Crown Castle International Corp. (NYSE:CCI), Chubb Limited (NYSE:CB), The Bank of Nova Scotia (NYSE:BNS), The Sherwin-Williams Company (NYSE:SHW), and Capital One Financial Corp. (NYSE:COF). This group of stocks’ market caps match GM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FIS | 69 | 6044245 | -3 |
| DUK | 32 | 687541 | -4 |
| CCI | 45 | 2089073 | 3 |
| CB | 30 | 1272774 | -12 |
| BNS | 17 | 193321 | 3 |
| SHW | 44 | 1576816 | -5 |
| COF | 55 | 4708790 | -9 |
| Average | 41.7 | 2367509 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.7 hedge funds with bullish positions and the average amount invested in these stocks was $2368 million. That figure was $6417 million in GM’s case. Fidelity National Information Services Inc. (NYSE:FIS) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks General Motors Company (NYSE:GM) is more popular among hedge funds. Our overall hedge fund sentiment score for GM is 72.3. 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. 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 returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on GM as the stock returned 9.8% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
