The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL).
Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL) was in 12 hedge funds’ portfolios at the end of September. GGAL investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. There were 14 hedge funds in our database with GGAL holdings at the end of the previous quarter. 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 Blackhawk Network Holdings Inc (NASDAQ:HAWK), China Biologic Products Inc (NASDAQ:CBPO), and Steven Madden, Ltd. (NASDAQ:SHOO) to gather more data points.
Follow Grupo Financiero Galicia S A (NASDAQ:GGAL)
Follow Grupo Financiero Galicia S A (NASDAQ:GGAL)
At the moment there are a lot of signals shareholders can use to evaluate stocks. A pair of the less utilized signals are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite money managers can outpace the broader indices by a superb amount (see the details here).
Now, let’s review the latest action encompassing Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL).
How have hedgies been trading Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL)?
At the Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the number one position in Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL), worth close to $22 million, corresponding to 0.1% of its total 13F portfolio. On Arrowstreet Capital’s heels is Alan Howard’s Brevan Howard, with an $19.7 million position; the fund has 9.9% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions include Edmond M. Safra’s EMS Capital, Zach Schreiber’s Point State Capital and Jim Simons’ Renaissance Technologies.
Seeing as Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL) has faced falling interest from hedge fund managers, it’s easy to see that there was a specific group of hedge funds that elected to cut their entire stakes by the end of the third quarter. At the top of the heap, Marko Dimitrijevic’s Everest Capital dumped the biggest position of all the hedgies monitored by Insider Monkey, totaling close to $0.8 million in stock, and Mike Vranos’s Ellington was right behind this move, as the fund cut about $0.3 million worth of shares. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL) but similarly valued. These stocks are Blackhawk Network Holdings Inc (NASDAQ:HAWK), China Biologic Products Inc (NASDAQ:CBPO), Steven Madden, Ltd. (NASDAQ:SHOO), and Eldorado Gold Corp (USA) (NYSE:EGO). This group of stocks’ market values resemble GGAL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HAWK | 28 | 308495 | 1 |
| CBPO | 19 | 154311 | 0 |
| SHOO | 18 | 134345 | 3 |
| EGO | 14 | 55138 | -1 |
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $163 million. That figure was $74 million in GGAL’s case. Blackhawk Network Holdings Inc (NASDAQ:HAWK) is the most popular stock in this table. On the other hand Eldorado Gold Corp (USA) (NYSE:EGO) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Grupo Financiero Galicia S.A. (ADR) (NASDAQ:GGAL) is even less popular than EGO. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
