Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
In this article, we will discuss the hedge fund sentiment towards Global Blood Therapeutics Inc (NASDAQ:GBT). There were 16 funds in our database bullish on the stock at the end of September, down by four funds from the end of the second quarter. At the end of this article we will also compare GBT to other stocks including SP Plus Corp (NASDAQ:SP), Motorcar Parts of America, Inc. (NASDAQ:MPAA), and Radware Ltd. (NASDAQ:RDWR) to get a better sense of its popularity.
Follow Global Blood Therapeutics Inc. (NASDAQ:GBT)
Follow Global Blood Therapeutics Inc. (NASDAQ:GBT)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s go over the latest action regarding Global Blood Therapeutics Inc (NASDAQ:GBT).
Hedge fund activity in Global Blood Therapeutics Inc (NASDAQ:GBT)
At the end of the third quarter, 16 funds tracked by Insider Monkey held long positions in Global Blood Therapeutics Inc (NASDAQ:GBT), down by 20% from the end of the second quarter. By comparison, 14 hedge funds held shares or bullish call options in GBT heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Joseph Edelman’s Perceptive Advisors has the biggest position in Global Blood Therapeutics Inc (NASDAQ:GBT), worth close to $53.8 million, amounting to 3.5% of its total 13F portfolio. Coming in second is Sectoral Asset Management, led by Jerome Pfund and Michael Sjostrom, holding a $23.8 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions encompass Behzad Aghazadeh’s venBio Select Advisor, Richard Driehaus’s Driehaus Capital and Stuart Weisbrod’s Iguana Healthcare Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that sold off their entire stakes in the stock during the third quarter. It’s worth mentioning that Christopher James’s Partner Fund Management sold off the largest stake of all the hedgies tracked by Insider Monkey, worth an estimated $17.1 million in stock. Hal Mintz’s fund, Sabby Capital, also dumped its stock, about $4.2 million worth.
Let’s also examine hedge fund activity in other stocks similar to Global Blood Therapeutics Inc (NASDAQ:GBT). These stocks are SP Plus Corp (NASDAQ:SP), Motorcar Parts of America, Inc. (NASDAQ:MPAA), Radware Ltd. (NASDAQ:RDWR), and Altisource Residential Corp (NYSE:RESI). This group of stocks’ market valuations resemble GBT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SP | 10 | 34078 | 2 |
| MPAA | 10 | 63869 | -5 |
| RDWR | 11 | 167430 | 2 |
| RESI | 13 | 56390 | 7 |
As you can see these stocks had an average of 11 funds with bullish positions and the average amount invested in these stocks was $80 million, compared to $139 million in GBT’s case. Altisource Residential Corp (NYSE:RESI) is the most popular stock in this table, while SP Plus Corp (NASDAQ:SP) is the least popular one with only 10 investors holding shares. Compared to these stocks Global Blood Therapeutics Inc (NASDAQ:GBT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
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