Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Global Net Lease, Inc. (NYSE:GNL) in this article.
Global Net Lease, Inc. (NYSE:GNL) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that GNL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare GNL to other stocks including Perficient, Inc. (NASDAQ:PRFT), Century Communities, Inc (NYSE:CCS), and SiTime Corporation (NASDAQ:SITM) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are several formulas shareholders employ to assess publicly traded companies. A pair of the most underrated formulas are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outpace their index-focused peers by a healthy amount (see the details here).
Michael Gelband of ExodusPoint Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let’s take a glance at the key hedge fund action regarding Global Net Lease, Inc. (NYSE:GNL).
How have hedgies been trading Global Net Lease, Inc. (NYSE:GNL)?
Heading into the fourth quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in GNL over the last 21 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, LDR Capital held the most valuable stake in Global Net Lease, Inc. (NYSE:GNL), which was worth $6.5 million at the end of the third quarter. On the second spot was Marshall Wace LLP which amassed $1 million worth of shares. Two Sigma Advisors, Citadel Investment Group, and ExodusPoint Capital 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 LDR Capital allocated the biggest weight to Global Net Lease, Inc. (NYSE:GNL), around 6.44% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.28 percent of its 13F equity portfolio to GNL.
Seeing as Global Net Lease, Inc. (NYSE:GNL) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few money managers that elected to cut their full holdings last quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group cut the largest position of the 750 funds watched by Insider Monkey, totaling an estimated $2 million in stock. Renaissance Technologies, also said goodbye to its stock, about $1.2 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Global Net Lease, Inc. (NYSE:GNL). We will take a look at Perficient, Inc. (NASDAQ:PRFT), Century Communities, Inc (NYSE:CCS), SiTime Corporation (NASDAQ:SITM), YPF Sociedad Anonima (NYSE:YPF), OSI Systems, Inc. (NASDAQ:OSIS), Freedom Holding Corp. (NASDAQ:FRHC), and PQ Group Holdings Inc. (NYSE:PQG). This group of stocks’ market caps are similar to GNL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRFT | 17 | 74006 | -4 |
| CCS | 20 | 137952 | -1 |
| SITM | 6 | 97608 | -6 |
| YPF | 5 | 8535 | -3 |
| OSIS | 17 | 70797 | 4 |
| FRHC | 6 | 26711 | 3 |
| PQG | 13 | 36502 | 7 |
| Average | 12 | 64587 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $10 million in GNL’s case. Century Communities, Inc (NYSE:CCS) is the most popular stock in this table. On the other hand YPF Sociedad Anonima (NYSE:YPF) is the least popular one with only 5 bullish hedge fund positions. Global Net Lease, Inc. (NYSE:GNL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GNL is 25.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and surpassed the market again by 16 percentage points. Unfortunately GNL wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GNL investors were disappointed as the stock returned 9.1% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Global Net Lease Inc.
Follow Global Net Lease Inc.
Disclosure: None. This article was originally published at Insider Monkey.
