The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtGlobal Medical REIT Inc. (NYSE:GMRE) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Is Global Medical REIT Inc. (NYSE:GMRE) worth your attention right now? Money managers were becoming hopeful. The number of bullish hedge fund bets inched up by 1 lately. Our calculations also showed that GMRE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). GMRE was in 10 hedge funds’ portfolios at the end of March. There were 9 hedge funds in our database with GMRE positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the key hedge fund action surrounding Global Medical REIT Inc. (NYSE:GMRE).
How are hedge funds trading Global Medical REIT Inc. (NYSE:GMRE)?
At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GMRE over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Global Medical REIT Inc. (NYSE:GMRE), which was worth $5.5 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $4 million worth of shares. PEAK6 Capital Management, Millennium Management, and Dorset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Dorset Management allocated the biggest weight to Global Medical REIT Inc. (NYSE:GMRE), around 0.51% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.26 percent of its 13F equity portfolio to GMRE.
As industrywide interest jumped, key money managers have jumped into Global Medical REIT Inc. (NYSE:GMRE) headfirst. Quantinno Capital, managed by Hoon Kim, initiated the biggest position in Global Medical REIT Inc. (NYSE:GMRE). Quantinno Capital had $0.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new GMRE investors: Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Michael Gelband’s ExodusPoint Capital, and Jonathan Soros’s JS Capital.
Let’s also examine hedge fund activity in other stocks similar to Global Medical REIT Inc. (NYSE:GMRE). We will take a look at Patterson-UTI Energy, Inc. (NASDAQ:PTEN), UMH Properties, Inc (NYSE:UMH), Morphic Holding, Inc. (NASDAQ:MORF), and Zumiez Inc. (NASDAQ:ZUMZ). This group of stocks’ market values match GMRE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PTEN | 20 | 70412 | -9 |
| UMH | 5 | 4615 | 1 |
| MORF | 7 | 54095 | 3 |
| ZUMZ | 22 | 28267 | -2 |
| Average | 13.5 | 39347 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $13 million in GMRE’s case. Zumiez Inc. (NASDAQ:ZUMZ) is the most popular stock in this table. On the other hand UMH Properties, Inc (NYSE:UMH) is the least popular one with only 5 bullish hedge fund positions. Global Medical REIT Inc. (NYSE:GMRE) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and surpassed the market by 15.5 percentage points. Unfortunately GMRE wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); GMRE investors were disappointed as the stock returned 13.9% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
