Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Globant SA (NYSE:GLOB)? The smart money sentiment can provide an answer to this question.
Is GLOB a good stock to buy now? Money managers were in an optimistic mood. The number of bullish hedge fund bets increased by 4 in recent months. Globant SA (NYSE:GLOB) was in 21 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GLOB 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 today’s marketplace there are tons of methods market participants employ to value their stock investments. A pair of the most underrated methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass their index-focused peers by a superb margin (see the details here).
Lee Ainslie of Maverick Capital
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 15 best blue chip stocks 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. 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. Keeping this in mind let’s take a peek at the fresh hedge fund action encompassing Globant SA (NYSE:GLOB).
Do Hedge Funds Think GLOB Is A Good Stock To Buy Now?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 24% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards GLOB over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Globant SA (NYSE:GLOB) was held by Fisher Asset Management, which reported holding $205 million worth of stock at the end of September. It was followed by D E Shaw with a $17 million position. Other investors bullish on the company included Citadel Investment Group, PEAK6 Capital Management, and Sloane Robinson Investment Management. In terms of the portfolio weights assigned to each position Sloane Robinson Investment Management allocated the biggest weight to Globant SA (NYSE:GLOB), around 4.1% of its 13F portfolio. Cerebellum Capital is also relatively very bullish on the stock, earmarking 0.29 percent of its 13F equity portfolio to GLOB.
Now, specific money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the biggest position in Globant SA (NYSE:GLOB). Marshall Wace LLP had $2 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $1.1 million position during the quarter. The following funds were also among the new GLOB investors: Jinghua Yan’s TwinBeech Capital, Qing Li’s Sciencast Management, and Lee Ainslie’s Maverick Capital.
Let’s now review hedge fund activity in other stocks similar to Globant SA (NYSE:GLOB). These stocks are Williams-Sonoma, Inc. (NYSE:WSM), Penumbra Inc (NYSE:PEN), First Solar, Inc. (NASDAQ:FSLR), Vereit Inc (NYSE:VER), Cree, Inc. (NASDAQ:CREE), AMERCO (NASDAQ:UHAL), and IAA, Inc. (NYSE:IAA). This group of stocks’ market valuations are similar to GLOB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WSM | 31 | 455487 | 4 |
| PEN | 23 | 286645 | 3 |
| FSLR | 40 | 283671 | 24 |
| VER | 18 | 543958 | -5 |
| CREE | 30 | 650447 | 13 |
| UHAL | 19 | 437403 | -1 |
| IAA | 36 | 1299677 | -7 |
| Average | 28.1 | 565327 | 4.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $565 million. That figure was $251 million in GLOB’s case. First Solar, Inc. (NASDAQ:FSLR) is the most popular stock in this table. On the other hand Vereit Inc (NYSE:VER) is the least popular one with only 18 bullish hedge fund positions. Globant SA (NYSE:GLOB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GLOB is 45.8. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 December 14th and surpassed the market again by 15.8 percentage points. Unfortunately GLOB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GLOB investors were disappointed as the stock returned 5.8% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Globant S.a. (NYSE:GLOB)
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Disclosure: None. This article was originally published at Insider Monkey.
