During the first half of the fourth quarter the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by about 4 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor (i.e. only 298 S&P 500 constituents were among the 500 most popular stocks among hedge funds), and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Global Payments Inc (NYSE:GPN) and see how the stock is affected by the recent hedge fund activity.
Global Payments Inc (NYSE:GPN) investors should pay attention to an increase in hedge fund sentiment lately. Our calculations also showed that gpn isn’t among the 30 most popular stocks among hedge funds.
To most shareholders, hedge funds are perceived as slow, outdated financial vehicles of the past. While there are over 8,000 funds in operation today, Our experts hone in on the top tier of this group, about 700 funds. These money managers orchestrate bulk of the hedge fund industry’s total capital, and by shadowing their unrivaled stock picks, Insider Monkey has come up with a few investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by 6 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Let’s analyze the recent hedge fund action surrounding Global Payments Inc (NYSE:GPN).
What does the smart money think about Global Payments Inc (NYSE:GPN)?
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GPN over the last 13 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Global Payments Inc (NYSE:GPN) was held by Alkeon Capital Management, which reported holding $127.3 million worth of stock at the end of September. It was followed by Echo Street Capital Management with a $54.6 million position. Other investors bullish on the company included Marshall Wace LLP, Citadel Investment Group, and Renaissance Technologies.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Samlyn Capital, managed by Robert Pohly, initiated the most valuable position in Global Payments Inc (NYSE:GPN). Samlyn Capital had $23.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $11.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Bruce Garelick’s Garelick Capital Partners, Peter Muller’s PDT Partners, and Jeffrey Talpins’s Element Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Global Payments Inc (NYSE:GPN) but similarly valued. These stocks are FleetCor Technologies, Inc. (NYSE:FLT), Ctrip.com International, Ltd. (NASDAQ:CTRP), International Paper Company (NYSE:IP), and Nucor Corporation (NYSE:NUE). This group of stocks’ market valuations match GPN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FLT | 37 | 1371542 | 4 |
| CTRP | 19 | 1160299 | -12 |
| IP | 28 | 327944 | 7 |
| NUE | 31 | 553668 | 2 |
| Average | 28.75 | 853363 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.75 hedge funds with bullish positions and the average amount invested in these stocks was $853 million. That figure was $443 million in GPN’s case. FleetCor Technologies, Inc. (NYSE:FLT) is the most popular stock in this table. On the other hand Ctrip.com International, Ltd. (NASDAQ:CTRP) is the least popular one with only 19 bullish hedge fund positions. Global Payments Inc (NYSE:GPN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FLT might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
