It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Grifols SA, Barcelona (NASDAQ:GRFS) during the quarter below.
Grifols SA, Barcelona (NASDAQ:GRFS) shareholders have witnessed an increase in hedge fund sentiment recently. 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 Lam Research Corporation (NASDAQ:LRCX), Jarden Corp (NYSE:JAH), and Ameren Corp (NYSE:AEE) to gather more data points.
Today there are plenty of methods market participants employ to analyze their stock investments. Some of the best methods are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the broader indices by a very impressive amount (see the details here).
Now, let’s go over the fresh action encompassing Grifols SA, Barcelona (NASDAQ:GRFS).
How are hedge funds trading Grifols SA, Barcelona (NASDAQ:GRFS)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Paulson & Co, managed by John Paulson, holds the number one position in Grifols SA, Barcelona (NASDAQ:GRFS). Paulson & Co has a $539 million position in the stock, comprising 2.8% of its 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $36.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers that hold long positions consist of Farallon Capital, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Consequently, key hedge funds were breaking ground themselves. Highbridge Capital Management, managed by Glenn Russell Dubin, initiated the most outsized position in Grifols SA, Barcelona (NASDAQ:GRFS). Highbridge Capital Management had $3.9 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $2.6 million position during the quarter. The only other fund with a brand new GRFS position is Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Grifols SA, Barcelona (NASDAQ:GRFS) but similarly valued. These stocks are Lam Research Corporation (NASDAQ:LRCX), Jarden Corp (NYSE:JAH), Ameren Corp (NYSE:AEE), and Alcatel Lucent SA (ADR) (NYSE:ALU). All of these stocks’ market caps are similar to GRFS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LRCX | 45 | 1043496 | -3 |
| JAH | 42 | 1462444 | 9 |
| AEE | 18 | 459329 | 0 |
| ALU | 11 | 100794 | 1 |
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $767 million. That figure was $648 million in GRFS’s case. Lam Research Corporation (NASDAQ:LRCX) is the most popular stock in this table, while Alcatel Lucent SA (ADR) (NYSE:ALU) is the least popular one with only 11 bullish hedge fund positions. Grifols SA, Barcelona (NASDAQ:GRFS) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LRCX might be a better candidate to consider a long position.
