Is General Communication, Inc. (GNCMA) A Good Stock To Buy?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards General Communication, Inc. (NASDAQ:GNCMA).

Is General Communication, Inc. undervalued? Investors who are in the know are getting more optimistic. The number of long hedge fund bets increased by 3 lately. GNCMA was in 13 hedge funds’ portfolios at the end of the third quarter of 2015. There were 10 hedge funds in our database with GNCMA holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as VASCO Data Security International, Inc. (NASDAQ:VDSI), Encore Wire Corporation (NASDAQ:WIRE), and Enanta Pharmaceuticals Inc (NASDAQ:ENTA) to gather more data points.

At the moment there are plenty of tools investors have at their disposal to value publicly traded companies. A duo of the best tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top money managers can outpace their index-focused peers by a superb margin (see the details here).

With all of this in mind, we’re going to take a gander at the fresh action encompassing General Communication, Inc. (NASDAQ:GNCMA).

How are hedge funds trading General Communication, Inc. (NASDAQ:GNCMA)?

Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Jim Simons’ Renaissance Technologies has the biggest position in General Communication, Inc. (NASDAQ:GNCMA), worth close to $11.3 million, corresponding to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’ heels is Stonerise Capital Management, led by John C. Walker, holding a $8.6 million position; 3.8% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions encompass D. E. Shaw’s D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors and Joel Greenblatt’s Gotham Asset Management.

As industrywide interest jumped, some big names were breaking ground themselves. Stonerise Capital Management created the biggest position in General Communication, Inc. (NASDAQ:GNCMA). Peter Muller’s PDT Partners also made a $0.6 million investment in the stock during the quarter. The following funds were also among the new GNCMA investors: Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as General Communication, Inc. (NASDAQ:GNCMA) but similarly valued. We will take a look at VASCO Data Security International, Inc. (NASDAQ:VDSI), Encore Wire Corporation (NASDAQ:WIRE), Enanta Pharmaceuticals Inc (NASDAQ:ENTA), and Container Store Group Inc (NYSE:TCS). All of these stocks’ market caps resemble GNCMA’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $64 million, above the $30 million in GNCMA’s case. VASCO Data Security International, Inc. (NASDAQ:VDSI) is the most popular stock in this table. On the other hand Enanta Pharmaceuticals Inc (NASDAQ:ENTA) is the least popular one with only 6 bullish hedge fund positions. General Communication, Inc. (NASDAQ:GNCMA) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VDSI might be a better candidate to consider a long position.