As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Gran Tierra Energy Inc. (NYSE:GTE).
Is GTE a good stock to buy? Gran Tierra Energy Inc. (NYSE:GTE) has seen a decrease in hedge fund sentiment of late. Gran Tierra Energy Inc. (NYSE:GTE) was in 6 hedge funds’ portfolios at the end of March. The all time high for this statistic is 22. Our calculations also showed that GTE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to go over the latest hedge fund action regarding Gran Tierra Energy Inc. (NYSE:GTE).
Do Hedge Funds Think GTE Is A Good Stock To Buy Now?
At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in GTE a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
More specifically, GMT Capital was the largest shareholder of Gran Tierra Energy Inc. (NYSE:GTE), with a stake worth $31.3 million reported as of the end of March. Trailing GMT Capital was Arrowstreet Capital, which amassed a stake valued at $4.2 million. Two Sigma Advisors, Millennium Management, and Citadel Investment Group 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 GMT Capital allocated the biggest weight to Gran Tierra Energy Inc. (NYSE:GTE), around 2.3% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to GTE.
Since Gran Tierra Energy Inc. (NYSE:GTE) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of money managers that elected to cut their full holdings by the end of the first quarter. Intriguingly, Renaissance Technologies dropped the largest position of all the hedgies tracked by Insider Monkey, valued at close to $1.3 million in stock. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also dropped its stock, about $1.2 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Gran Tierra Energy Inc. (NYSE:GTE). These stocks are Iteris Inc (NYSE:ITI), Oil-Dri Corporation of America (NYSE:ODC), Ucommune International Ltd (NASDAQ:UK), Resonant Inc. (NASDAQ:RESN), ACNB Corporation (NASDAQ:ACNB), NuCana plc (NASDAQ:NCNA), and Atossa Genetics Inc. (NASDAQ:ATOS). This group of stocks’ market caps are closest to GTE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ITI | 16 | 42326 | 4 |
| ODC | 4 | 29522 | 0 |
| UK | 4 | 705 | 1 |
| RESN | 6 | 5809 | 2 |
| ACNB | 1 | 1099 | 0 |
| NCNA | 7 | 16780 | 0 |
| ATOS | 6 | 7811 | 3 |
| Average | 6.3 | 14865 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.3 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $37 million in GTE’s case. Iteris Inc (NYSE:ITI) is the most popular stock in this table. On the other hand ACNB Corporation (NASDAQ:ACNB) is the least popular one with only 1 bullish hedge fund positions. Gran Tierra Energy Inc. (NYSE:GTE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GTE is 27.8. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on GTE, though not to the same extent, as the stock returned 11.4% since the end of Q1 (through June 25th) and outperformed the market.
Follow Gran Tierra Energy Inc. (NYSEMKT:GTE)
Follow Gran Tierra Energy Inc. (NYSEMKT:GTE)
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Disclosure: None. This article was originally published at Insider Monkey.
