Hedge Funds Are Selling Gevo, Inc. (GEVO)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Gevo, Inc. (NASDAQ:GEVO).

Gevo, Inc. (NASDAQ:GEVO) has experienced a decrease in support from the world’s most elite money managers of late. Gevo, Inc. (NASDAQ:GEVO) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. There were 7 hedge funds in our database with GEVO positions at the end of the fourth quarter. Our calculations also showed that GEVO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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.

Donald Sussman of Paloma Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. Now let’s go over the latest hedge fund action surrounding Gevo, Inc. (NASDAQ:GEVO).

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

At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. On the other hand, there were a total of 1 hedge funds with a bullish position in GEVO a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies,  holds the most valuable position in Gevo, Inc. (NASDAQ:GEVO). Renaissance Technologies has a $41.5 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $13.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions encompass Ken Griffin’s Citadel Investment Group, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Gevo, Inc. (NASDAQ:GEVO), around 0.05% of its 13F portfolio. LMR Partners is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to GEVO.

Due to the fact that Gevo, Inc. (NASDAQ:GEVO) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of funds that elected to cut their entire stakes heading into Q2. Interestingly, Donald Sussman’s Paloma Partners said goodbye to the biggest position of the 750 funds followed by Insider Monkey, totaling about $0.3 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund dropped about $0.1 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 1 funds heading into Q2.

Let’s go over hedge fund activity in other stocks similar to Gevo, Inc. (NASDAQ:GEVO). These stocks are The Buckle, Inc. (NYSE:BKE), Perficient, Inc. (NASDAQ:PRFT), Knowles Corp (NYSE:KN), Equinox Gold Corp. (NYSE:EQX), Hostess Brands, Inc. (NASDAQ:TWNK), Sumo Logic, Inc. (NASDAQ:SUMO), and The Macerich Company (NYSE:MAC). All of these stocks’ market caps are similar to GEVO’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.6 hedge funds with bullish positions and the average amount invested in these stocks was $169 million. That figure was $61 million in GEVO’s case. Hostess Brands, Inc. (NASDAQ:TWNK) is the most popular stock in this table. On the other hand Sumo Logic, Inc. (NASDAQ:SUMO) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Gevo, Inc. (NASDAQ:GEVO) is even less popular than SUMO. Our overall hedge fund sentiment score for GEVO is 29.7. 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. Hedge funds dodged a bullet by taking a bearish stance towards GEVO. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th but managed to beat the market again by 4.8 percentage points. Unfortunately GEVO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); GEVO investors were disappointed as the stock returned -16.9% since the end of the first quarter (through 6/25) 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.

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