Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Gulfport Energy Corporation (NASDAQ:GPOR) investors should pay attention to an increase in enthusiasm from smart money in recent months. GPOR was in 22 hedge funds’ portfolios at the end of December. There were 20 hedge funds in our database with GPOR holdings at the end of the previous quarter. Our calculations also showed that GPOR 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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to view the fresh hedge fund action encompassing Gulfport Energy Corporation (NASDAQ:GPOR).
Hedge fund activity in Gulfport Energy Corporation (NASDAQ:GPOR)
At the end of the fourth quarter, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GPOR over the last 14 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Firefly Value Partners was the largest shareholder of Gulfport Energy Corporation (NASDAQ:GPOR), with a stake worth $63.7 million reported as of the end of December. Trailing Firefly Value Partners was Citadel Investment Group, which amassed a stake valued at $32.7 million. D E Shaw, Portolan Capital Management, and Arrowstreet Capital were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, key hedge funds have been driving this bullishness. Firefly Value Partners, managed by Ryan Heslop and Ariel Warszawski, created the largest call position in Gulfport Energy Corporation (NASDAQ:GPOR). Firefly Value Partners had $28.5 million invested in the company at the end of the quarter. George McCabe’s Portolan Capital Management also made a $5.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Himanshu H. Shah’s Shah Capital Management, and Joe DiMenna’s ZWEIG DIMENNA PARTNERS.
Let’s also examine hedge fund activity in other stocks similar to Gulfport Energy Corporation (NASDAQ:GPOR). These stocks are PennyMac Mortgage Investment Trust (NYSE:PMT), Hecla Mining Company (NYSE:HL), Myovant Sciences Ltd. (NYSE:MYOV), and Ambarella Inc (NASDAQ:AMBA). This group of stocks’ market values are similar to GPOR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PMT | 11 | 18567 | 4 |
| HL | 9 | 14554 | -2 |
| MYOV | 5 | 81654 | -2 |
| AMBA | 14 | 74667 | -1 |
| Average | 9.75 | 47361 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $129 million in GPOR’s case. Ambarella Inc (NASDAQ:AMBA) is the most popular stock in this table. On the other hand Myovant Sciences Ltd. (NYSE:MYOV) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Gulfport Energy Corporation (NASDAQ:GPOR) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately GPOR wasn’t nearly as popular as these 15 stock and hedge funds that were betting on GPOR were disappointed as the stock returned 8.2% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
