Hedge Funds Are Piling Into Golden Entertainment Inc (GDEN)

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Golden Entertainment Inc (NASDAQ:GDEN).

Golden Entertainment Inc (NASDAQ:GDEN) investors should pay attention to an increase in enthusiasm from smart money of late. Golden Entertainment Inc (NASDAQ:GDEN) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 18 hedge funds in our database with GDEN positions at the end of the first quarter. Our calculations also showed that GDEN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are numerous metrics shareholders can use to size up their holdings. A duo of the less utilized metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can outclass their index-focused peers by a healthy amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 view the recent hedge fund action surrounding Golden Entertainment Inc (NASDAQ:GDEN).

Do Hedge Funds Think GDEN Is A Good Stock To Buy Now?

At Q2’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GDEN over the last 24 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Among these funds, Hill Path Capital held the most valuable stake in Golden Entertainment Inc (NASDAQ:GDEN), which was worth $58.8 million at the end of the second quarter. On the second spot was Nantahala Capital Management which amassed $32.5 million worth of shares. Indaba Capital Management, Driehaus Capital, and Renaissance Technologies 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 Indaba Capital Management allocated the biggest weight to Golden Entertainment Inc (NASDAQ:GDEN), around 3.5% of its 13F portfolio. Hill Path Capital is also relatively very bullish on the stock, dishing out 3.37 percent of its 13F equity portfolio to GDEN.

As industrywide interest jumped, specific money managers were breaking ground themselves. Manatuck Hill Partners, managed by Mark Broach, established the most valuable position in Golden Entertainment Inc (NASDAQ:GDEN). Manatuck Hill Partners had $4 million invested in the company at the end of the quarter. Frederick DiSanto’s Ancora Advisors also initiated a $3.6 million position during the quarter. The following funds were also among the new GDEN investors: Paul Holland and Matthew Miller’s Glaxis Capital Management, Peter Muller’s PDT Partners, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Golden Entertainment Inc (NASDAQ:GDEN) but similarly valued. These stocks are Studio City International Holdings Limited (NYSE:MSC), New Mountain Finance Corp. (NYSE:NMFC), Cambium Networks Corporation (NASDAQ:CMBM), Grupo Financiero Galicia S.A. (NASDAQ:GGAL), Schweitzer-Mauduit International, Inc. (NYSE:SWM), TriCo Bancshares (NASDAQ:TCBK), and Zumiez Inc. (NASDAQ:ZUMZ). This group of stocks’ market values are similar to GDEN’s market value.

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As you can see these stocks had an average of 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $217 million in GDEN’s case. Cambium Networks Corporation (NASDAQ:CMBM) is the most popular stock in this table. On the other hand Studio City International Holdings Limited (NYSE:MSC) is the least popular one with only 3 bullish hedge fund positions. Golden Entertainment Inc (NASDAQ:GDEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GDEN is 83. 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 October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on GDEN as the stock returned 8.8% since the end of Q2 (through 10/22) 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.

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