The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Gevo, Inc. (NASDAQ:GEVO) based on those filings.
Is Gevo, Inc. (NASDAQ:GEVO) an exceptional investment right now? The smart money was in a bullish mood. The number of bullish hedge fund bets increased by 2 recently. Gevo, Inc. (NASDAQ:GEVO) was in 4 hedge funds’ portfolios at the end of September. The all time high for this statistics is 5. Our calculations also showed that GEVO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Peter Algert of Algert Global
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s check out the key hedge fund action surrounding Gevo, Inc. (NASDAQ:GEVO).
Hedge fund activity in Gevo, Inc. (NASDAQ:GEVO)
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the second quarter of 2020. By comparison, 1 hedge funds held shares or bullish call options in GEVO 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.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the biggest position in Gevo, Inc. (NASDAQ:GEVO). Renaissance Technologies has a $0.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Ken Griffin of Citadel Investment Group, with a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish encompass Michael Gelband’s ExodusPoint Capital, Peter Algert’s Algert Global and . In terms of the portfolio weights assigned to each position Algert Global allocated the biggest weight to Gevo, Inc. (NASDAQ:GEVO), around 0.0048% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0006 percent of its 13F equity portfolio to GEVO.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. ExodusPoint Capital, managed by Michael Gelband, established the most outsized position in Gevo, Inc. (NASDAQ:GEVO). ExodusPoint Capital had $0 million invested in the company at the end of the quarter. Peter Algert’s Algert Global also made a $0 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Gevo, Inc. (NASDAQ:GEVO) but similarly valued. These stocks are Innodata Inc (NASDAQ:INOD), Aravive, Inc. (NASDAQ:ARAV), Northern Technologies International Corp (NASDAQ:NTIC), iMedia Brands, Inc. (NASDAQ:IMBI), Computer Task Group, Inc. (NASDAQ:CTG), Core Molding Technologies, Inc. (NYSE:CMT), and Drive Shack Inc. (NYSE:DS). This group of stocks’ market caps are closest to GEVO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INOD | 1 | 3587 | -2 |
| ARAV | 7 | 4429 | 0 |
| NTIC | 4 | 4818 | 0 |
| IMBI | 5 | 3730 | 4 |
| CTG | 5 | 12432 | 0 |
| CMT | 4 | 11881 | 0 |
| DS | 7 | 1378 | -2 |
| Average | 4.7 | 6036 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.7 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $1 million in GEVO’s case. Aravive, Inc. (NASDAQ:ARAV) is the most popular stock in this table. On the other hand Innodata Inc (NASDAQ:INOD) is the least popular one with only 1 bullish hedge fund positions. Gevo, Inc. (NASDAQ:GEVO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GEVO is 56. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on GEVO as the stock returned 113% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
Follow Gevo Inc. (NASDAQ:GEVO)
Follow Gevo Inc. (NASDAQ:GEVO)
Disclosure: None. This article was originally published at Insider Monkey.
