Hedge Funds Think Highly of Greif, Inc. (GEF)

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Greif, Inc. (NYSE:GEF) investors should pay attention to a decrease in hedge fund interest in recent months. 20 hedge funds in our database were long GEF on September 30. There were 21 hedge funds in our database with GEF 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 Tetra Tech, Inc. (NASDAQ:TTEK), Barnes Group Inc. (NYSE:B), and Alexander & Baldwin Inc (NYSE:ALEX) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

fredex/Shutterstock.com

Hedge fund activity in Greif, Inc. (NYSE:GEF)

Heading into the fourth quarter of 2016, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a dip of 5% from the previous quarter, as hedge fund ownership of the stock remains in a narrow range. There were a total of 18 hedge funds with a bullish position in GEF at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Paul J. Isaac’s Arbiter Partners Capital Management has the most valuable position in Greif, Inc. (NYSE:GEF), worth close to $48.9 million, accounting for 5.8% of its total 13F portfolio. On Arbiter Partners Capital Management’s heels is Mario Gabelli of GAMCO Investors, with a $46.4 million position. Some other hedge funds and institutional investors that are bullish comprise Chuck Royce’s Royce & Associates, Cliff Asness’ AQR Capital Management, and Joel Greenblatt’s Gotham Asset Management. We should note that Arbiter Partners Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Since Greif, Inc. (NYSE:GEF) has weathered falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of funds who were dropping their full holdings heading into Q4. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP got rid of the biggest position of the “upper crust” of funds monitored by Insider Monkey, valued at close to $1.6 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also said goodbye to its stock, about $0.5 million worth.

Let’s go over hedge fund activity in other stocks similar to Greif, Inc. (NYSE:GEF). We will take a look at Tetra Tech, Inc. (NASDAQ:TTEK), Barnes Group Inc. (NYSE:B), Alexander & Baldwin Inc (NYSE:ALEX), and Healthequity Inc (NASDAQ:HQY). This group of stocks’ market caps resemble GEF’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $183 million in GEF’s case. Tetra Tech, Inc. (NASDAQ:TTEK) is the most popular stock in this table. On the other hand Alexander & Baldwin Inc (NYSE:ALEX) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Greif, Inc. (NYSE:GEF) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None