Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Great Elm Capital Corp. (NASDAQ:GECC) based on that data.
Great Elm Capital Corp. (NASDAQ:GECC) investors should pay attention to a decrease in hedge fund interest in recent months. Great Elm Capital Corp. (NASDAQ:GECC) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. Our calculations also showed that GECC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Matthew Drapkin of Becker Drapkin Management
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Do Hedge Funds Think GECC Is A Good Stock To Buy Now?
At first quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GECC over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Becker Drapkin Management, managed by Matthew Drapkin and Steven R. Becker, holds the biggest position in Great Elm Capital Corp. (NASDAQ:GECC). Becker Drapkin Management has a $4.6 million position in the stock, comprising 1.3% of its 13F portfolio. On Becker Drapkin Management’s heels is Randall Smith of Alden Global Capital, with a $3.1 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Becker Drapkin Management allocated the biggest weight to Great Elm Capital Corp. (NASDAQ:GECC), around 1.3% of its 13F portfolio. Alden Global Capital is also relatively very bullish on the stock, earmarking 1.18 percent of its 13F equity portfolio to GECC.
Judging by the fact that Great Elm Capital Corp. (NASDAQ:GECC) has experienced declining sentiment from hedge fund managers, it’s safe to say that there were a few funds who sold off their entire stakes last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group dumped the largest position of the 750 funds tracked by Insider Monkey, worth close to $0.2 million in stock. Israel Englander’s fund, Millennium Management, also sold off its stock, about $0.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Great Elm Capital Corp. (NASDAQ:GECC) but similarly valued. These stocks are FedNat Holding Co (NASDAQ:FNHC), Entasis Therapeutics Holdings Inc. (NASDAQ:ETTX), InspireMD Inc (NASDAQ:NSPR), Salem Media Group Inc. (NASDAQ:SALM), Allena Pharmaceuticals, Inc. (NASDAQ:ALNA), LENSAR, Inc. (NASDAQ:LNSR), and CohBar, Inc. (NASDAQ:CWBR). This group of stocks’ market caps are similar to GECC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FNHC | 6 | 6836 | -1 |
| ETTX | 2 | 1830 | -1 |
| NSPR | 3 | 3190 | -1 |
| SALM | 6 | 3579 | 5 |
| ALNA | 8 | 15824 | 1 |
| LNSR | 7 | 24076 | 0 |
| CWBR | 1 | 741 | -2 |
| Average | 4.7 | 8011 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.7 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $9 million in GECC’s case. Allena Pharmaceuticals, Inc. (NASDAQ:ALNA) is the most popular stock in this table. On the other hand CohBar, Inc. (NASDAQ:CWBR) is the least popular one with only 1 bullish hedge fund positions. Great Elm Capital Corp. (NASDAQ:GECC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GECC is 44.4. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on GECC as the stock returned 9.7% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
