In this article you are going to find out whether hedge funds think Globe Life Inc. (NYSE:GL) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Globe Life Inc. (NYSE:GL) an attractive stock to buy now? Prominent investors were becoming less hopeful. The number of long hedge fund bets fell by 5 in recent months. Globe Life Inc. (NYSE:GL) was in 28 hedge funds’ portfolios at the end of June. The all time high for this statistic is 33. Our calculations also showed that GL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 33 hedge funds in our database with GL holdings at the end of March.
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Richard S. Pzena of Pzena Investment Management
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Do Hedge Funds Think GL Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GL over the last 24 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Berkshire Hathaway was the largest shareholder of Globe Life Inc. (NYSE:GL), with a stake worth $605.2 million reported as of the end of June. Trailing Berkshire Hathaway was Millennium Management, which amassed a stake valued at $32.4 million. Pzena Investment Management, Prospector Partners, and Schonfeld Strategic Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Prospector Partners allocated the biggest weight to Globe Life Inc. (NYSE:GL), around 2.66% of its 13F portfolio. Hi-Line Capital Management is also relatively very bullish on the stock, dishing out 2.02 percent of its 13F equity portfolio to GL.
Judging by the fact that Globe Life Inc. (NYSE:GL) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that slashed their full holdings in the second quarter. At the top of the heap, Martin D. Sass’s MD Sass cut the largest investment of the 750 funds monitored by Insider Monkey, comprising an estimated $21.4 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund sold off about $2.4 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 5 funds in the second quarter.
Let’s now review hedge fund activity in other stocks similar to Globe Life Inc. (NYSE:GL). We will take a look at Playtika Holding Corp. (NASDAQ:PLTK), Appian Corporation (NASDAQ:APPN), Sasol Limited (NYSE:SSL), UGI Corp (NYSE:UGI), Credicorp Ltd. (NYSE:BAP), The Middleby Corporation (NASDAQ:MIDD), and First Solar, Inc. (NASDAQ:FSLR). This group of stocks’ market caps are closest to GL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLTK | 26 | 463637 | 5 |
| APPN | 13 | 879312 | -11 |
| SSL | 5 | 63156 | -2 |
| UGI | 23 | 275405 | 4 |
| BAP | 19 | 233067 | -3 |
| MIDD | 35 | 821535 | 7 |
| FSLR | 31 | 317049 | 7 |
| Average | 21.7 | 436166 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.7 hedge funds with bullish positions and the average amount invested in these stocks was $436 million. That figure was $795 million in GL’s case. The Middleby Corporation (NASDAQ:MIDD) is the most popular stock in this table. On the other hand Sasol Limited (NYSE:SSL) is the least popular one with only 5 bullish hedge fund positions. Globe Life Inc. (NYSE:GL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GL is 63.8. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on GL as the stock returned 2.8% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
