Is Global Medical REIT Inc. (NYSE:GMRE) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Global Medical REIT Inc. (NYSE:GMRE) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 18. GMRE has experienced a decrease in enthusiasm from smart money lately. There were 18 hedge funds in our database with GMRE positions at the end of the first quarter. Our calculations also showed that GMRE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Paul Marshall of Marshall Wace
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s go over the new hedge fund action encompassing Global Medical REIT Inc. (NYSE:GMRE).
Do Hedge Funds Think GMRE Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -44% from the previous quarter. By comparison, 7 hedge funds held shares or bullish call options in GMRE a year ago. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Global Medical REIT Inc. (NYSE:GMRE), with a stake worth $6.3 million reported as of the end of June. Trailing Millennium Management was Renaissance Technologies, which amassed a stake valued at $6 million. Two Sigma Advisors, Marshall Wace LLP, and Toscafund Asset 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 Toscafund Asset Management allocated the biggest weight to Global Medical REIT Inc. (NYSE:GMRE), around 1.88% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to GMRE.
Because Global Medical REIT Inc. (NYSE:GMRE) has witnessed declining sentiment from hedge fund managers, logic holds that there is a sect of funds that decided to sell off their entire stakes by the end of the second quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest investment of the 750 funds followed by Insider Monkey, comprising about $4.1 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also said goodbye to its stock, about $3.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 8 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Global Medical REIT Inc. (NYSE:GMRE) but similarly valued. These stocks are Westport Fuel Systems Inc. (NASDAQ:WPRT), ORBCOMM Inc (NASDAQ:ORBC), Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT), SFL Corporation Ltd. (NYSE:SFL), Washington Trust Bancorp (NASDAQ:WASH), Enanta Pharmaceuticals Inc (NASDAQ:ENTA), and Apollo Investment Corp. (NASDAQ:AINV). All of these stocks’ market caps match GMRE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WPRT | 16 | 61381 | 1 |
| ORBC | 26 | 169669 | 7 |
| ARCT | 13 | 155410 | -2 |
| SFL | 18 | 54048 | 4 |
| WASH | 9 | 21816 | 2 |
| ENTA | 14 | 233726 | 0 |
| AINV | 10 | 36833 | -1 |
| Average | 15.1 | 104698 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $105 million. That figure was $25 million in GMRE’s case. ORBCOMM Inc (NASDAQ:ORBC) is the most popular stock in this table. On the other hand Washington Trust Bancorp (NASDAQ:WASH) is the least popular one with only 9 bullish hedge fund positions. Global Medical REIT Inc. (NYSE:GMRE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GMRE is 16.6. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately GMRE wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GMRE investors were disappointed as the stock returned 1.5% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Global Medical Reit Inc. (NYSE:GMRE)
Follow Global Medical Reit Inc. (NYSE:GMRE)
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Disclosure: None. This article was originally published at Insider Monkey.
