The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards GameStop Corp. (NYSE:GME).
Is GameStop Corp. (NYSE:GME) a buy here? Prominent investors are surely betting on the stock. The number of bullish hedge fund investments swelled by 2 lately. GME was in 31 hedge funds’ portfolios at the end of September. There were 29 hedge funds in our database with GME holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Western Refining, Inc. (NYSE:WNR), Wintrust Financial Corp (NASDAQ:WTFC), and Healthcare Services Group, Inc. (NASDAQ:HCSG) to gather more data points.
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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.
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How have hedgies been trading GameStop Corp. (NYSE:GME)?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 7% from one quarter earlier. On the other hand, there were a total of 36 hedge funds with a bullish position in GME at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Iridian Asset Management, led by David Cohen and Harold Levy, holds the most valuable position in GameStop Corp. (NYSE:GME). Iridian Asset Management has a $134.8 million position in the stock, comprising 1.2% of its 13F portfolio. The second largest stake is held by Stelliam Investment Management, led by Ross Margolies, holding a $53.1 million position; 1.8% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions comprise Cliff Asness’ AQR Capital Management, and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Iridian Asset Management, assembled the most outsized position in GameStop Corp. (NYSE:GME). David Keidan’s Buckingham Capital Management also made a $18.7 million investment in the stock during the quarter. The other funds with brand new GME positions are Ken Griffin’s Citadel Investment Group, Marc Majzner’s Clearline Capital, and John Hurley’s Cavalry Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to GameStop Corp. (NYSE:GME). We will take a look at Western Refining, Inc. (NYSE:WNR), Wintrust Financial Corp (NASDAQ:WTFC), Healthcare Services Group, Inc. (NASDAQ:HCSG), and Landstar System, Inc. (NASDAQ:LSTR). This group of stocks’ market valuations match GME’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WNR | 27 | 300226 | 4 |
| WTFC | 15 | 232267 | -4 |
| HCSG | 8 | 23359 | 3 |
| LSTR | 17 | 179246 | 1 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $364 million in GME’s case. Western Refining, Inc. (NYSE:WNR) is the most popular stock in this table. On the other hand Healthcare Services Group, Inc. (NASDAQ:HCSG) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks GameStop Corp. (NYSE:GME) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
