The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and famous investors’ filings. In this article, we analyze how these elite funds and prominent investors traded GATX Corporation (NYSE:GATX) based on those filings.
GATX Corporation (NYSE:GATX) was in 11 hedge funds’ portfolios at the end of the first quarter of 2019. GATX has seen a decrease in hedge fund sentiment lately. There were 14 hedge funds in our database with GATX positions at the end of the previous quarter. Our calculations also showed that gatx isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s view the new hedge fund action encompassing GATX Corporation (NYSE:GATX).
How are hedge funds trading GATX Corporation (NYSE:GATX)?
At Q1’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -21% from the fourth quarter of 2018. On the other hand, there were a total of 9 hedge funds with a bullish position in GATX a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, GAMCO Investors was the largest shareholder of GATX Corporation (NYSE:GATX), with a stake worth $172.2 million reported as of the end of March. Trailing GAMCO Investors was AQR Capital Management, which amassed a stake valued at $24.1 million. Winton Capital Management, D E Shaw, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as GATX Corporation (NYSE:GATX) has witnessed falling interest from hedge fund managers, it’s easy to see that there exists a select few funds that decided to sell off their entire stakes last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, valued at close to $2.6 million in stock. Jim Simons’s fund, Renaissance Technologies, also said goodbye to its stock, about $1.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as GATX Corporation (NYSE:GATX) but similarly valued. We will take a look at Noah Holdings Limited (NYSE:NOAH), Pan American Silver Corp. (NASDAQ:PAAS), Mercury General Corporation (NYSE:MCY), and Murphy USA Inc. (NYSE:MUSA). This group of stocks’ market values are closest to GATX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NOAH | 14 | 253895 | 3 |
| PAAS | 17 | 212637 | 2 |
| MCY | 15 | 142808 | -3 |
| MUSA | 21 | 187051 | -3 |
| Average | 16.75 | 199098 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $199 million. That figure was $239 million in GATX’s case. Murphy USA Inc. (NYSE:MUSA) is the most popular stock in this table. On the other hand Noah Holdings Limited (NYSE:NOAH) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks GATX Corporation (NYSE:GATX) is even less popular than NOAH. Hedge funds dodged a bullet by taking a bearish stance towards GATX. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GATX wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); GATX investors were disappointed as the stock returned 0.1% during the same time frame 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 the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.
