Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) was in 19 hedge funds’ portfolios at the end of September. GWPH shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. There were 15 hedge funds in our database with GWPH 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 Columbia Banking System Inc (NASDAQ:COLB), Werner Enterprises, Inc. (NASDAQ:WERN), and Shanda Games Limited(ADR) (NASDAQ:GAME) to gather more data points.
To most traders, hedge funds are assumed to be worthless, old investment vehicles of years past. While there are over 8000 funds trading today, We look at the moguls of this group, around 700 funds. These money managers manage bulk of the hedge fund industry’s total capital, and by keeping an eye on their finest stock picks, Insider Monkey has determined a few investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Keeping this in mind, we’re going to take a look at the latest action regarding GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH).
How have hedgies been trading GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from the second quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Deerfield Management, managed by James E. Flynn, holds the number one position in GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH). Deerfield Management has a $35.7 million position in the stock, comprising 1.4% of its 13F portfolio. Coming in second is OrbiMed Advisors, managed by Samuel Isaly, which holds a $34.5 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions consist of Anders Hove and Bong Koh’s VHCP Management and Charles Clough’s Clough Capital Partners.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Hayman Advisors initiated the biggest position in GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH). Hayman Advisors had $19.3 million invested in the company at the end of the quarter. David Lamond’s Lamond Capital Partners also initiated a $11 million position during the quarter. The other funds with brand new GWPH positions are Jeffrey Jay and David Kroin’s Great Point Partners, Malcolm Fairbairn’s Ascend Capital, and David Costen Haley’s HBK Investments.
Let’s now review hedge fund activity in other stocks similar to GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH). These stocks are Columbia Banking System Inc (NASDAQ:COLB), Werner Enterprises, Inc. (NASDAQ:WERN), Shanda Games Limited(ADR) (NASDAQ:GAME), and Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE). This group of stocks’ market values are closest to GWPH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COLB | 14 | 131452 | 3 |
| WERN | 14 | 122921 | -3 |
| GAME | 7 | 62600 | 0 |
| COKE | 7 | 53106 | -1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $194 million in GWPH’s case. Columbia Banking System Inc (NASDAQ:COLB) is the most popular stock in this table with 14 funds reporting stakes as of September 30. On the other hand Shanda Games Limited(ADR) (NASDAQ:GAME) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
