Is GLUU Stock A Buy?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Glu Mobile Inc. (NASDAQ:GLUU) changed recently.

Is GLUU stock a buy? Glu Mobile Inc. (NASDAQ:GLUU) was in 30 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 35. GLUU has experienced an increase in activity from the world’s largest hedge funds recently. There were 26 hedge funds in our database with GLUU holdings at the end of September. Our calculations also showed that GLUU isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

David Siegel of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. 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 let’s take a look at the key hedge fund action encompassing Glu Mobile Inc. (NASDAQ:GLUU).

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

At the end of December, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards GLUU over the last 22 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Arrowstreet Capital was the largest shareholder of Glu Mobile Inc. (NASDAQ:GLUU), with a stake worth $28.8 million reported as of the end of December. Trailing Arrowstreet Capital was Shelter Haven Capital Management, which amassed a stake valued at $22.9 million. Renaissance Technologies, Two Sigma Advisors, and Woodline Partners 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 Shelter Haven Capital Management allocated the biggest weight to Glu Mobile Inc. (NASDAQ:GLUU), around 8.04% of its 13F portfolio. Becker Drapkin Management is also relatively very bullish on the stock, setting aside 3.49 percent of its 13F equity portfolio to GLUU.

Now, specific money managers have been driving this bullishness. Scopus Asset Management, managed by Alexander Mitchell, initiated the most valuable position in Glu Mobile Inc. (NASDAQ:GLUU). Scopus Asset Management had $16 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $0.8 million position during the quarter. The following funds were also among the new GLUU investors: Louis Bacon’s Moore Global Investments, Peter Algert’s Algert Global, and Mika Toikka’s AlphaCrest Capital Management.

Let’s check out hedge fund activity in other stocks similar to Glu Mobile Inc. (NASDAQ:GLUU). These stocks are U.S. Physical Therapy, Inc. (NYSE:USPH), The ODP Corporation (NASDAQ:ODP), BrightSphere Investment Group Inc (NYSE:BSIG), Global Net Lease, Inc. (NYSE:GNL), Bally’s Corporation (NYSE:BALY), Inseego Corp. (NASDAQ:INSG), and LTC Properties Inc (NYSE:LTC). This group of stocks’ market caps resemble GLUU’s market cap.

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As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $197 million. That figure was $191 million in GLUU’s case. BrightSphere Investment Group Inc (NYSE:BSIG) is the most popular stock in this table. On the other hand Global Net Lease, Inc. (NYSE:GNL) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Glu Mobile Inc. (NASDAQ:GLUU) is more popular among hedge funds. Our overall hedge fund sentiment score for GLUU is 84.7. 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 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 returned 12.2% in 2021 through April 12th but still managed to beat the market by 1.5 percentage points. Hedge funds were also right about betting on GLUU as the stock returned 38.3% since the end of December (through 4/12) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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