GNC Holdings Inc (NYSE:GNC) was in 29 hedge funds’ portfolio at the end of the fourth quarter of 2012. GNC investors should pay attention to an increase in enthusiasm from smart money recently. There were 28 hedge funds in our database with GNC holdings at the end of the previous quarter.
In the eyes of most shareholders, hedge funds are seen as unimportant, old investment tools of yesteryear. While there are more than 8000 funds trading at the moment, we at Insider Monkey look at the masters of this club, around 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by keeping an eye on their top equity investments, we have unearthed a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as integral, positive insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are a variety of reasons for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).
Now, we’re going to take a gander at the key action surrounding GNC Holdings Inc (NYSE:GNC).
How are hedge funds trading GNC Holdings Inc (NYSE:GNC)?
In preparation for this year, a total of 29 of the hedge funds we track held long positions in this stock, a change of 4% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Dinakar Singh’s TPG-AXON Management LP had the largest position in GNC Holdings Inc (NYSE:GNC), worth close to $157 million, comprising 8.1% of its total 13F portfolio. Sitting at the No. 2 spot is Donald Chiboucis of Columbus Circle Investors, with a $74 million position; 1.3% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Ken Griffin’s Citadel Investment Group, Alexander Mitchell’s Scopus Asset Management and Clint Carlson’s Carlson Capital.
As aggregate interest increased, key hedge funds have jumped into GNC Holdings Inc (NYSE:GNC) headfirst. Highline Capital Management, managed by Jacob Doft, initiated the largest position in GNC Holdings Inc (NYSE:GNC). Highline Capital Management had 27 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $17 million position during the quarter. The other funds with new positions in the stock are Alexander Mitchell’s Scopus Asset Management, John Murphy’s Alydar Capital, and Mark Kingdon’s Kingdon Capital.
How are insiders trading GNC Holdings Inc (NYSE:GNC)?
Insider buying is best served when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time frame, GNC Holdings Inc (NYSE:GNC) has experienced 4 unique insiders purchasing, and 9 insider sales (see the details of insider trades here).
With the results demonstrated by our time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and GNC Holdings Inc (NYSE:GNC) shareholders fit into this picture quite nicely.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
