Should I Buy Gran Tierra Energy Inc. (GTE)?

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Gran Tierra Energy Inc. (NYSE:GTE).

Is Gran Tierra Energy Inc. (NYSE:GTE) the right investment to pursue these days? The smart money was becoming more confident. The number of bullish hedge fund positions increased by 4 in recent months. Gran Tierra Energy Inc. (NYSE:GTE) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 22. Our calculations also showed that GTE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Thomas Claugus of GMT Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to analyze the fresh hedge fund action surrounding Gran Tierra Energy Inc. (NYSE:GTE).

Do Hedge Funds Think GTE Is A Good Stock To Buy Now?

At second quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GTE over the last 24 quarters. So, let’s check out 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, GMT Capital, managed by Thomas E. Claugus, holds the largest position in Gran Tierra Energy Inc. (NYSE:GTE). GMT Capital has a $24 million position in the stock, comprising 1.8% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $3.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include Renaissance Technologies, David Harding’s Winton Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position GMT Capital allocated the biggest weight to Gran Tierra Energy Inc. (NYSE:GTE), around 1.79% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to GTE.

Consequently, some big names have been driving this bullishness. Renaissance Technologies, assembled the biggest position in Gran Tierra Energy Inc. (NYSE:GTE). Renaissance Technologies had $0.5 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew L Pinz’s Pinz Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Gran Tierra Energy Inc. (NYSE:GTE) but similarly valued. We will take a look at Leju Holdings Ltd (NYSE:LEJU), Intrusion Inc. (NASDAQ:INTZ), Immersion Corporation (NASDAQ:IMMR), Ondas Holdings Inc. (NASDAQ:ONDS), Xeris Pharmaceuticals, Inc. (NASDAQ:XERS), Seelos Therapeutics, Inc. (NASDAQ:SEEL), and Ocwen Financial Corporation (NYSE:OCN). This group of stocks’ market caps resemble GTE’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.6 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $29 million in GTE’s case. Immersion Corporation (NASDAQ:IMMR) is the most popular stock in this table. On the other hand Leju Holdings Ltd (NYSE:LEJU) is the least popular one with only 2 bullish hedge fund positions. Gran Tierra Energy Inc. (NYSE:GTE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GTE is 43.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately GTE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GTE were disappointed as the stock returned -2.7% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.