Is GL Stock A Buy or Sell?

Is Globe Life Inc. (NYSE:GL) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is GL stock a buy? Hedge fund interest in Globe Life Inc. (NYSE:GL) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that GL isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). 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 Morningstar, Inc. (NASDAQ:MORN), Fastly, Inc. (NYSE:FSLY), and Molson Coors Beverage Company (NYSE:TAP) to gather more data points.

To the average investor there are several methods shareholders can use to grade publicly traded companies. A pair of the most useful methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outperform the broader indices by a solid amount (see the details here).

Richard S. Pzena of Pzena Investment Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to take a glance at the fresh hedge fund action regarding Globe Life Inc. (NYSE:GL).

Do Hedge Funds Think GL Is A Good Stock To Buy Now?

At the end of December, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards GL over the last 22 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

More specifically, Berkshire Hathaway was the largest shareholder of Globe Life Inc. (NYSE:GL), with a stake worth $603.4 million reported as of the end of December. Trailing Berkshire Hathaway was Citadel Investment Group, which amassed a stake valued at $60.5 million. Prospector Partners, Pzena Investment Management, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position MD Sass allocated the biggest weight to Globe Life Inc. (NYSE:GL), around 3.76% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, setting aside 3.08 percent of its 13F equity portfolio to GL.

Since Globe Life Inc. (NYSE:GL) has witnessed falling interest from the smart money, we can see that there were a few money managers who were dropping their entire stakes last quarter. Intriguingly, Benjamin A. Smith’s Laurion Capital Management dropped the biggest stake of the “upper crust” of funds followed by Insider Monkey, totaling close to $0.3 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund said goodbye to about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks similar to Globe Life Inc. (NYSE:GL). These stocks are Morningstar, Inc. (NASDAQ:MORN), Fastly, Inc. (NYSE:FSLY), Molson Coors Beverage Company (NYSE:TAP), Algonquin Power & Utilities Corp. (NYSE:AQN), Gaming and Leisure Properties Inc (NASDAQ:GLPI), Dolby Laboratories, Inc. (NYSE:DLB), and Five Below Inc (NASDAQ:FIVE). This group of stocks’ market valuations are similar to GL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $831 million. That figure was $829 million in GL’s case. Five Below Inc (NASDAQ:FIVE) is the most popular stock in this table. On the other hand Algonquin Power & Utilities Corp. (NYSE:AQN) is the least popular one with only 15 bullish hedge fund positions. Globe Life Inc. (NYSE:GL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GL is 62.8. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and beat the market again by 1.5 percentage points. Unfortunately GL wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on GL were disappointed as the stock returned 6.6% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.