Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 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’ recent losses in Facebook. Let’s take a closer look at what the funds we track think about Globant SA (NYSE:GLOB) in this article.
Is Globant SA (NYSE:GLOB) a buy right now? Hedge funds are in a bearish mood. The number of long hedge fund positions decreased by 2 lately. Our calculations also showed that GLOB isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to check out the fresh hedge fund action regarding Globant SA (NYSE:GLOB).
Hedge fund activity in Globant SA (NYSE:GLOB)
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the second quarter of 2018. By comparison, 7 hedge funds held shares or bullish call options in GLOB heading into 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.
The largest stake in Globant SA (NYSE:GLOB) was held by Millennium Management, which reported holding $29.3 million worth of stock at the end of September. It was followed by Marshall Wace LLP with a $14.7 million position. Other investors bullish on the company included Sloane Robinson Investment Management, D E Shaw, and LMR Partners.
Since Globant SA (NYSE:GLOB) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedgies that elected to cut their positions entirely by the end of the third quarter. Interestingly, Benjamin A. Smith’s Laurion Capital Management cut the biggest position of all the hedgies followed by Insider Monkey, totaling an estimated $8.5 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dumped about $4.3 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Globant SA (NYSE:GLOB) but similarly valued. These stocks are Retail Opportunity Investments Corp (NASDAQ:ROIC), STAAR Surgical Company (NASDAQ:STAA), The Children’s Place Inc. (NASDAQ:PLCE), and CNOOC Limited (NYSE:CEO). All of these stocks’ market caps resemble GLOB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ROIC | 11 | 15038 | 7 |
| STAA | 24 | 853639 | 9 |
| PLCE | 23 | 390120 | -2 |
| CEO | 15 | 365182 | 2 |
| Average | 18.25 | 405995 | 4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $406 million. That figure was $75 million in GLOB’s case. STAAR Surgical Company (NASDAQ:STAA) is the most popular stock in this table. On the other hand Retail Opportunity Investments Corp (NASDAQ:ROIC) is the least popular one with only 11 bullish hedge fund positions. Globant SA (NYSE:GLOB) 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 STAA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
