Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Gartner Inc (NYSE:IT).
Gartner Inc (NYSE:IT) shareholders have witnessed a decrease in support from the world’s most elite money managers lately. Our calculations also showed that IT isn’t among the 30 most popular stocks among hedge funds.
If you’d ask most traders, hedge funds are seen as slow, outdated investment vehicles of the past. While there are over 8000 funds with their doors open today, Our experts choose to focus on the bigwigs of this group, approximately 750 funds. It is estimated that this group of investors shepherd the lion’s share of the hedge fund industry’s total asset base, and by following their highest performing investments, Insider Monkey has come up with numerous investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let’s view the recent hedge fund action encompassing Gartner Inc (NYSE:IT).
How are hedge funds trading Gartner Inc (NYSE:IT)?
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in IT a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Select Equity Group, managed by Robert Joseph Caruso, holds the most valuable position in Gartner Inc (NYSE:IT). Select Equity Group has a $639 million position in the stock, comprising 4.3% of its 13F portfolio. On Select Equity Group’s heels is Bares Capital Management, led by Brian Bares, holding a $358.6 million position; 10.1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism comprise Gabriel Plotkin’s Melvin Capital Management, Seth Rosen’s Nitorum Capital and Ken Griffin’s Citadel Investment Group.
Judging by the fact that Gartner Inc (NYSE:IT) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of money managers that decided to sell off their entire stakes last quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management dumped the biggest investment of all the hedgies tracked by Insider Monkey, comprising about $17.6 million in stock. Vikas Lunia’s fund, Lunia Capital, also dropped its stock, about $16.6 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 6 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Gartner Inc (NYSE:IT). We will take a look at Wayfair Inc (NYSE:W), WellCare Health Plans, Inc. (NYSE:WCG), Conagra Brands, Inc. (NYSE:CAG), and Live Nation Entertainment, Inc. (NYSE:LYV). This group of stocks’ market valuations resemble IT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| W | 30 | 2455188 | 2 |
| WCG | 47 | 1898984 | 8 |
| CAG | 33 | 811917 | 0 |
| LYV | 39 | 1020951 | 2 |
| Average | 37.25 | 1546760 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.25 hedge funds with bullish positions and the average amount invested in these stocks was $1547 million. That figure was $1206 million in IT’s case. WellCare Health Plans, Inc. (NYSE:WCG) is the most popular stock in this table. On the other hand Wayfair Inc (NYSE:W) is the least popular one with only 30 bullish hedge fund positions. Compared to these stocks Gartner Inc (NYSE:IT) is even less popular than W. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on IT, though not to the same extent, as the stock returned 5.7% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
