The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have gone over 730 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 28th. In this article we look at what those investors think of Greif, Inc. (NYSE:GEF).
Greif, Inc. (NYSE:GEF) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds’ portfolios at the end of the second quarter of 2019. 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 ProAssurance Corporation (NYSE:PRA), Meritor Inc (NYSE:MTOR), and Denali Therapeutics Inc. (NASDAQ:DNLI) to gather more data points. Our calculations also showed that GEF isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a gander at the fresh hedge fund action surrounding Greif, Inc. (NYSE:GEF).
What does smart money think about Greif, Inc. (NYSE:GEF)?
At Q2’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in GEF a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Greif, Inc. (NYSE:GEF). GAMCO Investors has a $28.2 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Arbiter Partners Capital Management, managed by Paul J. Isaac, which holds a $17.4 million position; the fund has 3.8% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass Ken Griffin’s Citadel Investment Group, Paul Marshall and Ian Wace’s Marshall Wace LLP and D. E. Shaw’s D E Shaw.
Because Greif, Inc. (NYSE:GEF) has witnessed a decline in interest from the smart money, logic holds that there lies a certain “tier” of hedgies who sold off their full holdings by the end of the second quarter. At the top of the heap, Renaissance Technologies cut the biggest investment of all the hedgies tracked by Insider Monkey, worth about $2.1 million in stock. David Costen Haley’s fund, HBK Investments, also cut its stock, about $1.1 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to Greif, Inc. (NYSE:GEF). We will take a look at ProAssurance Corporation (NYSE:PRA), Meritor Inc (NYSE:MTOR), Denali Therapeutics Inc. (NASDAQ:DNLI), and BrightView Holdings, Inc. (NYSE:BV). This group of stocks’ market caps resemble GEF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRA | 15 | 183901 | 1 |
| MTOR | 23 | 329539 | 5 |
| DNLI | 9 | 20646 | -1 |
| BV | 8 | 304619 | -1 |
| Average | 13.75 | 209676 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $210 million. That figure was $90 million in GEF’s case. Meritor Inc (NYSE:MTOR) is the most popular stock in this table. On the other hand BrightView Holdings, Inc. (NYSE:BV) is the least popular one with only 8 bullish hedge fund positions. Greif, Inc. (NYSE:GEF) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on GEF as the stock returned 17.7% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
