Here is What Hedge Funds Think About Greenhill & Co., Inc. (GHL)

Is Greenhill & Co., Inc. (NYSE:GHL) a buy right now? Hedge funds are taking a bullish view. The number of long hedge fund positions increased by 3 lately.

To most shareholders, hedge funds are seen as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds in operation at present, we at Insider Monkey look at the bigwigs of this group, around 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total capital, and by tracking their best stock picks, we have brought to light a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as key, optimistic insider trading activity is a second way to break down the marketplace. As the old adage goes: there are many stimuli for an executive to drop shares of his or her company, but just one, very obvious reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if investors know where to look (learn more here).

Now, we’re going to take a look at the key action encompassing Greenhill & Co., Inc. (NYSE:GHL).

What have hedge funds been doing with Greenhill & Co., Inc. (NYSE:GHL)?

In preparation for this quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 43% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes considerably.

Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Greenhill & Co., Inc. (NYSE:GHL). Citadel Investment Group has a $24 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is Matthew Lindenbaum of Basswood Capital, with a $17.5 million position; 1.3% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Ken Fisher’s Fisher Asset Management, John Murphy’s Alydar Capital and Jim Simons’s Renaissance Technologies.

Consequently, some big names have jumped into Greenhill & Co., Inc. (NYSE:GHL) headfirst. Alydar Capital, managed by John Murphy, created the most outsized position in Greenhill & Co., Inc. (NYSE:GHL). Alydar Capital had 12 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $1.6 million investment in the stock during the quarter. The other funds with brand new GHL positions are Mike Vranos’s Ellington, D. E. Shaw’s D E Shaw, and Matthew Tewksbury’s Stevens Capital Management.

What do corporate executives and insiders think about Greenhill & Co., Inc. (NYSE:GHL)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past half-year. Over the last 180-day time frame, Greenhill & Co., Inc. (NYSE:GHL) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Greenhill & Co., Inc. (NYSE:GHL). These stocks are Oppenheimer Holdings Inc. (USA) (NYSE:OPY), Raymond James Financial, Inc. (NYSE:RJF), Knight Capital Group Inc. (NYSE:KCG), Investment Technology Group (NYSE:ITG), and Stifel Financial Corp. (NYSE:SF). This group of stocks belong to the investment brokerage – regional industry and their market caps match GHL’s market cap.

With the returns demonstrated by the aforementioned studies, retail investors should always monitor hedge fund and insider trading activity, and Greenhill & Co., Inc. (NYSE:GHL) is an important part of this process.

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