Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Green Plains Inc (NASDAQ:GPRE) an attractive stock to buy now? The smart money is getting more optimistic. The number of bullish hedge fund positions rose by 4 in recent months. At the end of this article we will also compare GPRE to other stocks including Hanmi Financial Corp (NASDAQ:HAFC), PharMerica Corporation (NYSE:PMC), and Ingles Markets, Incorporated (NASDAQ:IMKTA) to get a better sense of its popularity.
Follow Green Plains Inc. (NASDAQ:GPRE)
Follow Green Plains Inc. (NASDAQ:GPRE)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Andrey_Popov/Shutterstock.com
Now, we’re going to view the recent action surrounding Green Plains Inc (NASDAQ:GPRE).
Hedge fund activity in Green Plains Inc (NASDAQ:GPRE)
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the second quarter of 2016. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Tourbillon Capital Partners, managed by Jason Karp, holds the biggest position in Green Plains Inc (NASDAQ:GPRE). Tourbillon Capital Partners has a $94.4 million position in the stock, comprising 1.9% of its 13F portfolio. The second largest stake is held by Water Street Capital, managed by Gilchrist Berg, which holds a $36.7 million position; 1.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions include D. E. Shaw’s D E Shaw, Steve Cohen’s Point72 Asset Management and Israel Englander’s Millennium Management.
As one would reasonably expect, key money managers have jumped into Green Plains Inc (NASDAQ:GPRE) headfirst. Water Street Capital, managed by Gilchrist Berg, initiated the most valuable position in Green Plains Inc (NASDAQ:GPRE). Water Street Capital had $36.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $23.8 million position during the quarter. The following funds were also among the new GPRE investors: Robert Polak’s Anchor Bolt Capital, Benjamin A. Smith’s Laurion Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Green Plains Inc (NASDAQ:GPRE) but similarly valued. These stocks are Hanmi Financial Corp (NASDAQ:HAFC), PharMerica Corporation (NYSE:PMC), Ingles Markets, Incorporated (NASDAQ:IMKTA), and Isle of Capri Casinos (NASDAQ:ISLE). This group of stocks’ market values match GPRE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HAFC | 8 | 48653 | 1 |
| PMC | 14 | 65037 | -2 |
| IMKTA | 10 | 54781 | 0 |
| ISLE | 22 | 220166 | 0 |
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $277 million in GPRE’s case. Isle of Capri Casinos (NASDAQ:ISLE) is the most popular stock in this table. On the other hand Hanmi Financial Corp (NASDAQ:HAFC) is the least popular one with only 8 bullish hedge fund positions. Green Plains Inc (NASDAQ:GPRE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ISLE might be a better candidate to consider a long position.
Suggested Articles:
Easiest Smartphones To Use For Seniors
Most Profitable Online Businesses To Start
Highest Paying Countries For Teachers
Disclosure: None
