In this article we will check out the progression of hedge fund sentiment towards Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 16 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that GLDD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare GLDD to other stocks including Sprott Inc. (NYSE:SII), Preferred Bank (NASDAQ:PFBC), and Viper Energy Partners LP (NASDAQ:VNOM) to get a better sense of its popularity.
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Do Hedge Funds Think GLDD Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in GLDD a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) was held by Renaissance Technologies, which reported holding $31.3 million worth of stock at the end of December. It was followed by D E Shaw with a $21.7 million position. Other investors bullish on the company included Royce & Associates, Minerva Advisors, and Millennium Management. In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), around 7.87% of its 13F portfolio. Harvey Partners is also relatively very bullish on the stock, setting aside 5.23 percent of its 13F equity portfolio to GLDD.
Because Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedge funds that decided to sell off their positions entirely by the end of the first quarter. Interestingly, Todd J. Kantor’s Encompass Capital Advisors dropped the biggest stake of the 750 funds followed by Insider Monkey, totaling about $12.1 million in stock. Noam Gottesman’s fund, GLG Partners, also sold off its stock, about $1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD). We will take a look at Sprott Inc. (NYSE:SII), Preferred Bank (NASDAQ:PFBC), Viper Energy Partners LP (NASDAQ:VNOM), Despegar.com, Corp. (NYSE:DESP), Mercer International Inc. (NASDAQ:MERC), HomeStreet Inc (NASDAQ:HMST), and Pampa Energia S.A. (NYSE:PAM). All of these stocks’ market caps match GLDD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SII | 11 | 139612 | -6 |
| PFBC | 9 | 28320 | -5 |
| VNOM | 10 | 58683 | 0 |
| DESP | 18 | 217701 | 3 |
| MERC | 13 | 146360 | -2 |
| HMST | 12 | 57287 | 0 |
| PAM | 5 | 45253 | -1 |
| Average | 11.1 | 99031 | -1.6 |
View table here if you experience formatting issues.
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 $99 million. That figure was $121 million in GLDD’s case. Despegar.com, Corp. (NYSE:DESP) is the most popular stock in this table. On the other hand Pampa Energia S.A. (NYSE:PAM) is the least popular one with only 5 bullish hedge fund positions. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GLDD is 66.5. 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. 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 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately GLDD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GLDD were disappointed as the stock returned 0.8% since the end of March (through 7/23) 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 many of these stocks already outperformed the market since 2019.
Follow Great Lakes Dredge & Dock Corp (NASDAQ:GLDD)
Follow Great Lakes Dredge & Dock Corp (NASDAQ:GLDD)
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Disclosure: None. This article was originally published at Insider Monkey.
