A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Granite Construction Inc. (NYSE:GVA).
Granite Construction Inc. (NYSE:GVA) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds’ portfolios at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as American Assets Trust, Inc (NYSE:AAT), Pattern Energy Group Inc (NASDAQ:PEGI), and Rice Midstream Partners LP(NYSE:RMP) to gather more data points.
Follow Granite Construction Inc (NYSE:GVA)
Follow Granite Construction Inc (NYSE:GVA)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
Thanapun/Shutterstock.com
What have hedge funds been doing with Granite Construction Inc. (NYSE:GVA)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, same as in the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in GVA over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Principal Global Investors’ Columbus Circle Investors has the number one position in Granite Construction Inc. (NYSE:GVA), worth close to $23.3 million. Coming in second is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $18.7 million position. Some other hedge funds and institutional investors with similar optimism include Peter Schliemann’s Rutabaga Capital Management, Anand Parekh’s Alyeska Investment Group and John Croghan and Richard Fradin’s Rail-Splitter Capital 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.
Since Granite Construction Inc. (NYSE:GVA) has experienced falling interest from hedge fund managers, it’s safe to say that there was a specific group of fund managers who were dropping their full holdings in the third quarter. It’s worth mentioning that Bruce Kovner’s Caxton Associates LP dumped the largest position of the 700 funds watched by Insider Monkey, worth an estimated $3.1 million in stock, and David Costen Haley’s HBK Investments was right behind this move, as the fund said goodbye to about $1.1 million worth of shares.
Let’s now review hedge fund activity in other stocks similar to Granite Construction Inc. (NYSE:GVA). We will take a look at American Assets Trust, Inc (NYSE:AAT), Pattern Energy Group Inc (NASDAQ:PEGI), Rice Midstream Partners LP(NYSE:RMP), and Cott Corporation (USA) (NYSE:COT). This group of stocks’ market caps are similar to GVA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AAT | 6 | 144693 | -5 |
| PEGI | 15 | 164750 | -2 |
| RMP | 7 | 125322 | 3 |
| COT | 22 | 370670 | 7 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $201 million. That figure was $97 million in GVA’s case. Cott Corporation (USA) (NYSE:COT) is the most popular stock in this table. On the other hand American Assets Trust, Inc (NYSE:AAT) is the least popular one with only 6 bullish hedge fund positions. Granite Construction Inc. (NYSE:GVA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard COT might be a better candidate to consider taking a long position in.
Disclosure: None
