After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Genuine Parts Company (NYSE:GPC).
Is Genuine Parts Company (NYSE:GPC) a healthy stock for your portfolio? Hedge funds were getting more optimistic. The number of long hedge fund bets went up by 1 lately. Genuine Parts Company (NYSE:GPC) was in 26 hedge funds’ portfolios at the end of March. The all time high for this statistic is 29. Our calculations also showed that GPC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To the average investor there are a large number of formulas shareholders employ to value their holdings. A duo of the less utilized formulas are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can outclass the S&P 500 by a very impressive margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Mario Gabelli of GAMCO Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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 let’s check out the key hedge fund action encompassing Genuine Parts Company (NYSE:GPC).
Do Hedge Funds Think GPC Is A Good Stock To Buy Now?
At Q1’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the fourth quarter of 2020. By comparison, 22 hedge funds held shares or bullish call options in GPC a year ago. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, GAMCO Investors, managed by Mario Gabelli, holds the largest position in Genuine Parts Company (NYSE:GPC). GAMCO Investors has a $91.7 million position in the stock, comprising 0.8% of its 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $62.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Jack Woodruff’s Candlestick Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Dmitry Balyasny’s Balyasny Asset Management. In terms of the portfolio weights assigned to each position Candlestick Capital Management allocated the biggest weight to Genuine Parts Company (NYSE:GPC), around 1.16% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.8 percent of its 13F equity portfolio to GPC.
As one would reasonably expect, specific money managers have been driving this bullishness. Candlestick Capital Management, managed by Jack Woodruff, established the most valuable position in Genuine Parts Company (NYSE:GPC). Candlestick Capital Management had $52.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $35.5 million position during the quarter. The other funds with brand new GPC positions are Dmitry Balyasny’s Balyasny Asset Management, Renaissance Technologies, and Ali Motamed’s Invenomic Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Genuine Parts Company (NYSE:GPC). These stocks are The Liberty SiriusXM Group (NASDAQ:LSXMA), Smith & Nephew plc (NYSE:SNN), Brookfield Property Partners LP (NASDAQ:BPY), Akamai Technologies, Inc. (NASDAQ:AKAM), Cincinnati Financial Corporation (NASDAQ:CINF), Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), and Mid America Apartment Communities Inc (NYSE:MAA). All of these stocks’ market caps are similar to GPC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LSXMA | 38 | 1727128 | -4 |
| SNN | 11 | 42029 | -1 |
| BPY | 17 | 205102 | 8 |
| AKAM | 25 | 206922 | -8 |
| CINF | 22 | 886358 | 2 |
| ALNY | 33 | 740380 | -6 |
| MAA | 25 | 251877 | -1 |
| Average | 24.4 | 579971 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $580 million. That figure was $357 million in GPC’s case. The Liberty SiriusXM Group (NASDAQ:LSXMA) is the most popular stock in this table. On the other hand Smith & Nephew plc (NYSE:SNN) is the least popular one with only 11 bullish hedge fund positions. Genuine Parts Company (NYSE:GPC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GPC is 60.7. 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 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on GPC, though not to the same extent, as the stock returned 12.8% since Q1 (through July 9th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
