General Dynamics Corporation (GD) Hedge Funds Are Snapping Up

The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards General Dynamics Corporation (NYSE:GD).

Is General Dynamics Corporation (NYSE:GD) a worthy investment right now? Prominent investors are getting more optimistic. The number of bullish hedge fund bets rose by 3 in recent months. At the end of this article, we will also compare General Dynamics Corporation (NYSE:GD) to other stocks, including NextEra Energy, Inc. (NYSE:NEE), Infosys Ltd ADR (NYSE:INFY), and Netflix, Inc. (NASDAQ:NFLX) to get a better sense of its popularity.

In the eyes of most shareholders, hedge funds are viewed as underperforming, old financial tools of yesteryear. While there are over 8000 funds in operation at the moment, Our experts look at the moguls of this group, approximately 700 funds. These investment experts shepherd the lion’s share of the smart money’s total capital, and by tailing their unrivaled equity investments, Insider Monkey has identified several investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, let’s review the key action regarding General Dynamics Corporation (NYSE:GD).

Hedge fund activity in General Dynamics Corporation (NYSE:GD)

Heading into Q4, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 8% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, James A. Star’s Longview Asset Management has the most valuable position in General Dynamics Corporation (NYSE:GD), worth close to $4.60 billion, accounting for 98.3% of its total 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $335 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions include D E Shaw, Israel Englander’s Millennium Management, and Phill Gross and Robert Atchinson’s Adage Capital Management.

As aggregate interest increased, specific money managers have jumped into General Dynamics Corporation (NYSE:GD) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the biggest position in General Dynamics Corporation (NYSE:GD). Arrowstreet Capital had $40.4 million invested in the company at the end of the quarter. Lawrence Sapanski’s Scoria Capital also initiated a $27.6 million position during the quarter. The following funds were also among the new General Dynamics Corporation (NYSE:GD) investors: Steve Cohen’s Point72 Asset Management, Matthew Tewksbury’s Stevens Capital Management, and Alec Litowitz and Ross Laser’s Magnetar Capital.

Let’s also examine hedge fund activity in other stocks similar to General Dynamics Corporation (NYSE:GD). These stocks are NextEra Energy, Inc. (NYSE:NEE), Infosys Ltd ADR (NYSE:INFY), Netflix, Inc. (NASDAQ:NFLX), and E I Du Pont De Nemours And Co (NYSE:DD). All of these stocks’ market caps are closest to General Dynamics Corporation (NYSE:GD)’s market cap.

As you can see, these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $3.01 billion. That figure was $6.05 billion in General Dynamics Corporation (NYSE:GD)’s case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand, Infosys Ltd ADR (NYSE:INFY) is the least popular one with only 19 bullish hedge fund positions. General Dynamics Corporation (NYSE:GD) 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, Netflix, Inc. (NASDAQ:NFLX) might be a better candidate to consider a long position.