Hedge Funds Are Selling Greenhill & Co., Inc. (GHL)

Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Greenhill & Co., Inc. (NYSE:GHL) from the perspective of those elite funds.

Greenhill & Co., Inc. investors should be aware of a decrease in support from the world’s most elite money managers of late. GHL was in 15 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with GHL holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Hibbett Sports, Inc. (NASDAQ:HIBB), Endologix, Inc. (NASDAQ:ELGX), and Teekay Tankers Ltd. (NYSE:TNK) to gather more data points.

With all of this in mind, we’re going to view the key action encompassing Greenhill & Co., Inc. (NYSE:GHL).

How are hedge funds trading Greenhill & Co., Inc. (NYSE:GHL)?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Greenhill & Co., Inc. (NYSE:GHL). Citadel Investment Group has a $17.3 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which holds a $16.1 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism encompass Ken Fisher’s Fisher Asset Management, D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.

Because Greenhill & Co., Inc. (NYSE:GHL) has faced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers who sold off their full holdings heading into Q4. Intriguingly, Matthew Lindenbaum’s Basswood Capital dropped the largest position of all the hedgies watched by Insider Monkey, worth close to $9.7 million in stock. Millennium Management Subsidiary’s fund, Blue Arrow Capital Management, also dropped its stock, about $1.5 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Greenhill & Co., Inc. (NYSE:GHL) but similarly valued. These stocks are Hibbett Sports, Inc. (NASDAQ:HIBB), Endologix, Inc. (NASDAQ:ELGX), Teekay Tankers Ltd. (NYSE:TNK), and Rentrak Corporation (NASDAQ:RENT). This group of stocks’ market caps match GHL’s market cap.

As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $139 million. That figure was $58 million in GHL’s case. Endologix, Inc. (NASDAQ:ELGX) is the most popular stock in this table. On the other hand Hibbett Sports, Inc. (NASDAQ:HIBB) is the least popular one with only 11 bullish hedge fund positions. Greenhill & Co., Inc. (NYSE:GHL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ELGX might be a better candidate to consider a long position.