Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is General Motors Company (NYSE:GM), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is General Motors Company (NYSE:GM) worth your attention right now? Money managers were betting on the stock. The number of long hedge fund positions improved by 16 in recent months. General Motors Company (NYSE:GM) was in 86 hedge funds’ portfolios at the end of March. The all time high for this statistic is 88. Our calculations also showed that GM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 70 hedge funds in our database with GM positions at the end of the fourth quarter.
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ric Dillon of Diamond Hill Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a look at the fresh hedge fund action regarding General Motors Company (NYSE:GM).
Do Hedge Funds Think GM Is A Good Stock To Buy Now?
At the end of March, a total of 86 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GM over the last 23 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the biggest position in General Motors Company (NYSE:GM), worth close to $3.8498 billion, corresponding to 1.4% of its total 13F portfolio. The second largest stake is held by Eagle Capital Management, managed by Boykin Curry, which holds a $880.1 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish encompass Edgar Wachenheim’s Greenhaven Associates, Ric Dillon’s Diamond Hill Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Greenhaven Associates allocated the biggest weight to General Motors Company (NYSE:GM), around 13.7% of its 13F portfolio. Pennant Capital Management is also relatively very bullish on the stock, designating 9.88 percent of its 13F equity portfolio to GM.
Now, key hedge funds have jumped into General Motors Company (NYSE:GM) headfirst. Palestra Capital Management, managed by Andrew Immerman and Jeremy Schiffman, created the most outsized position in General Motors Company (NYSE:GM). Palestra Capital Management had $190.3 million invested in the company at the end of the quarter. Bill Miller’s Miller Value Partners also initiated a $96.9 million position during the quarter. The other funds with new positions in the stock are Jeffrey Altman’s Owl Creek Asset Management, Jos Shaver’s Electron Capital Partners, and Scott Bessent’s Key Square Capital Management.
Let’s go over hedge fund activity in other stocks similar to General Motors Company (NYSE:GM). We will take a look at Mondelez International Inc (NASDAQ:MDLZ), BP plc (NYSE:BP), Canadian National Railway Company (NYSE:CNI), Gilead Sciences, Inc. (NASDAQ:GILD), Automatic Data Processing (NASDAQ:ADP), Fiserv, Inc. (NASDAQ:FISV), and Infosys Limited (NYSE:INFY). This group of stocks’ market caps resemble GM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDLZ | 45 | 2845001 | -5 |
| BP | 29 | 1243778 | 0 |
| CNI | 36 | 4705189 | 5 |
| GILD | 65 | 2689659 | -7 |
| ADP | 42 | 2924374 | -6 |
| FISV | 75 | 2748118 | -19 |
| INFY | 26 | 2011419 | 3 |
| Average | 45.4 | 2738220 | -4.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 45.4 hedge funds with bullish positions and the average amount invested in these stocks was $2738 million. That figure was $8053 million in GM’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks General Motors Company (NYSE:GM) is more popular among hedge funds. Our overall hedge fund sentiment score for GM is 89.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately GM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GM were disappointed as the stock returned 7% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
