With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was GCP Applied Technologies Inc. (NYSE:GCP).
GCP Applied Technologies Inc. (NYSE:GCP) has experienced an increase in enthusiasm from smart money of late. Our calculations also showed that gcp isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the fresh hedge fund action surrounding GCP Applied Technologies Inc. (NYSE:GCP).
Hedge fund activity in GCP Applied Technologies Inc. (NYSE:GCP)
At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 63% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GCP over the last 15 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, 40 North Management held the most valuable stake in GCP Applied Technologies Inc. (NYSE:GCP), which was worth $151.4 million at the end of the first quarter. On the second spot was GAMCO Investors which amassed $100.4 million worth of shares. Moreover, Starboard Value LP, Moore Global Investments, and York Capital Management were also bullish on GCP Applied Technologies Inc. (NYSE:GCP), allocating a large percentage of their portfolios to this stock.
Now, key hedge funds have jumped into GCP Applied Technologies Inc. (NYSE:GCP) headfirst. Starboard Value LP, managed by Jeffrey Smith, initiated the biggest position in GCP Applied Technologies Inc. (NYSE:GCP). Starboard Value LP had $94.1 million invested in the company at the end of the quarter. Isaac Corre’s Governors Lane also made a $12.1 million investment in the stock during the quarter. The other funds with brand new GCP positions are Jim Simons’s Renaissance Technologies, Joseph Samuels’s Islet Management, and Zach Schreiber’s Point State Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as GCP Applied Technologies Inc. (NYSE:GCP) but similarly valued. We will take a look at Golar LNG Limited (NASDAQ:GLNG), CNX Resources Corporation (NYSE:CNX), Lexington Realty Trust (NYSE:LXP), and Belden Inc. (NYSE:BDC). This group of stocks’ market caps are closest to GCP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GLNG | 28 | 423133 | -4 |
| CNX | 21 | 706206 | -2 |
| LXP | 18 | 89917 | 2 |
| BDC | 16 | 68629 | 1 |
| Average | 20.75 | 321971 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $322 million. That figure was $539 million in GCP’s case. Golar LNG Limited (NASDAQ:GLNG) is the most popular stock in this table. On the other hand Belden Inc. (NYSE:BDC) is the least popular one with only 16 bullish hedge fund positions. GCP Applied Technologies Inc. (NYSE:GCP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately GCP wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GCP were disappointed as the stock returned -14.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
