There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Global Payments Inc (NYSE:GPN).
Global Payments Inc (NYSE:GPN) has experienced an increase in hedge fund sentiment in recent months. Our calculations also showed that GPN isn’t among the 30 most popular stocks among hedge funds.
At the moment there are tons of metrics market participants employ to analyze publicly traded companies. Two of the less known metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite investment managers can outperform the S&P 500 by a solid margin (see the details here).
We’re going to take a glance at the latest hedge fund action regarding Global Payments Inc (NYSE:GPN).
What have hedge funds been doing with Global Payments Inc (NYSE:GPN)?
Heading into the first quarter of 2019, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the second quarter of 2018. On the other hand, there were a total of 25 hedge funds with a bullish position in GPN a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Alkeon Capital Management held the most valuable stake in Global Payments Inc (NYSE:GPN), which was worth $102.7 million at the end of the third quarter. On the second spot was Echo Street Capital Management which amassed $58.7 million worth of shares. Moreover, Renaissance Technologies, Citadel Investment Group, and Shellback Capital were also bullish on Global Payments Inc (NYSE:GPN), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, key money managers were leading the bulls’ herd. Shellback Capital, managed by Doug Gordon, Jon Hilsabeck and Don Jabro, assembled the largest position in Global Payments Inc (NYSE:GPN). Shellback Capital had $36.2 million invested in the company at the end of the quarter. Peter Seuss’s Prana Capital Management also initiated a $28.4 million position during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Vikas Lunia’s Lunia Capital, and Sander Gerber’s Hudson Bay Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Global Payments Inc (NYSE:GPN). We will take a look at Nucor Corporation (NYSE:NUE), ResMed Inc. (NYSE:RMD), Aptiv PLC (NYSE:APTV), and Essex Property Trust Inc (NYSE:ESS). All of these stocks’ market caps are closest to GPN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NUE | 26 | 393481 | -5 |
| RMD | 22 | 394216 | -2 |
| APTV | 44 | 715224 | 1 |
| ESS | 19 | 432405 | 3 |
| Average | 27.75 | 483832 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $484 million. That figure was $476 million in GPN’s case. Aptiv PLC (NYSE:APTV) is the most popular stock in this table. On the other hand Essex Property Trust Inc (NYSE:ESS) is the least popular one with only 19 bullish hedge fund positions. Global Payments Inc (NYSE:GPN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Hedge funds were also right about betting on GPN as the stock returned 30.1% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
