Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Greenbrier Companies Inc (NYSE:GBX).
Is Greenbrier Companies Inc (NYSE:GBX) a marvelous investment today? Investors who are in the know are thoroughly taking an optimistic view. The number of bullish hedge fund positions rose by 5 in recent months. GBXwas in 18 hedge funds’ portfolios at the end of September. There were 13 hedge funds in our database with GBX positions at the end of the previous quarter. At the end of this article we will also compare GBX to other stocks including MakeMyTrip Limited (NASDAQ:MMYT), Select Comfort Corp. (NASDAQ:SCSS), and Mercury Systems Inc (NASDAQ:MRCY) to get a better sense of its popularity.
Follow Greenbrier Companies Inc (NYSE:GBX)
Follow Greenbrier Companies Inc (NYSE:GBX)
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 are hedge funds trading Greenbrier Companies Inc (NYSE:GBX)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a gain of 38% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in GBX at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Royce & Associates, led by Chuck Royce, holds the largest position in Greenbrier Companies Inc (NYSE:GBX). Royce & Associates has a $15.6 million position in the stock. Sitting at the No. 2 spot is Scopia Capital, led by Matt Sirovich and Jeremy Mindich, which holds a $10.1 million position. Remaining members of the smart money that hold long positions contain Mario Gabelli’s GAMCO Investors, Cliff Asness’ AQR Capital Management and Peter Muller’s PDT Partners. 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, key hedge funds have jumped into Greenbrier Companies Inc (NYSE:GBX) headfirst. Hutchin Hill Capital, led by Neil Chriss, created the most outsized position in Greenbrier Companies Inc (NYSE:GBX). Hutchin Hill Capital had $2.2 million invested in the company at the end of the quarter. Jim Simons’ Renaissance Technologies also initiated a $2.2 million position during the quarter. The following funds were also among the new GBX investors: Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors, and D. E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Greenbrier Companies Inc (NYSE:GBX) but similarly valued. These stocks are MakeMyTrip Limited (NASDAQ:MMYT), Select Comfort Corp. (NASDAQ:SCSS), Mercury Systems Inc (NASDAQ:MRCY), and Luminex Corporation (NASDAQ:LMNX). All of these stocks’ market caps match GBX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMYT | 12 | 157419 | -1 |
| SCSS | 11 | 71961 | -1 |
| MRCY | 12 | 103069 | -3 |
| LMNX | 14 | 109857 | -7 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $58 million in GBX’s case. Luminex Corporation (NASDAQ:LMNX) is the most popular stock in this table. On the other hand Select Comfort Corp. (NASDAQ:SCSS) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Greenbrier Companies Inc (NYSE:GBX) 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
