Is Gafisa SA (ADR) (NYSE:GFA) a marvelous investment right now? Money managers are getting more optimistic. The number of long hedge fund positions advanced by 1 recently.
In the financial world, there are dozens of metrics shareholders can use to track Mr. Market. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can beat the broader indices by a healthy margin (see just how much).
Just as important, bullish insider trading activity is another way to break down the marketplace. Just as you’d expect, there are a number of stimuli for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).
Consequently, let’s take a peek at the latest action surrounding Gafisa SA (ADR) (NYSE:GFA).
What have hedge funds been doing with Gafisa SA (ADR) (NYSE:GFA)?
At Q1’s end, a total of 7 of the hedge funds we track held long positions in this stock, a change of 17% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, D E Shaw, managed by D. E. Shaw, holds the largest position in Gafisa SA (ADR) (NYSE:GFA). D E Shaw has a $5.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Glenn Russell Dubin of Highbridge Capital Management, with a $4.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Jim Simons’s Renaissance Technologies, Jane Mendillo’s Harvard Management Co and Israel Englander’s Millennium Management.
As one would reasonably expect, specific money managers have been driving this bullishness. Highbridge Capital Management, managed by Glenn Russell Dubin, established the most valuable position in Gafisa SA (ADR) (NYSE:GFA). Highbridge Capital Management had 4.1 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $2.1 million position during the quarter. The following funds were also among the new GFA investors: Jane Mendillo’s Harvard Management Co and Matthew Tewksbury’s Stevens Capital Management.
Insider trading activity in Gafisa SA (ADR) (NYSE:GFA)
Insider buying is best served when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time frame, Gafisa SA (ADR) (NYSE:GFA) has seen zero unique insiders purchasing, 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 Gafisa SA (ADR) (NYSE:GFA). These stocks are Beazer Homes USA, Inc. (NYSE:BZH), M.D.C. Holdings, Inc. (NYSE:MDC), Meritage Homes Corp (NYSE:MTH), M/I Homes Inc (NYSE:MHO), and Hovnanian Enterprises, Inc. (NYSE:HOV). This group of stocks are in the residential construction industry and their market caps match GFA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Beazer Homes USA, Inc. (NYSE:BZH) | 17 | 0 | 0 |
| M.D.C. Holdings, Inc. (NYSE:MDC) | 14 | 0 | 4 |
| Meritage Homes Corp (NYSE:MTH) | 20 | 0 | 8 |
| M/I Homes Inc (NYSE:MHO) | 14 | 1 | 4 |
| Hovnanian Enterprises, Inc. (NYSE:HOV) | 20 | 0 | 2 |
With the returns shown by the aforementioned strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Gafisa SA (ADR) (NYSE:GFA) shareholders fit into this picture quite nicely.
