Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards TerraForm Global Inc (NASDAQ:GLBL).
TerraForm Global Inc shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. GLBL was in 23 hedge funds’ portfolios at the end of September. There were 0 hedge funds in our database with GLBL holdings at the end of the previous quarter due to the fact that GLBL did its IPO recently. At the end of this article we will also compare GLBL to other stocks including MiMedx Group Inc (NASDAQ:MDXG), American Woodmark Corporation (NASDAQ:AMWD), and Sunrun Inc (NASDAQ:RUN) to get a better sense of its popularity.
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To most market participants, hedge funds are perceived as worthless, old financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, Our researchers choose to focus on the aristocrats of this club, about 700 funds. These investment experts have their hands on most of all hedge funds’ total capital, and by tailing their best investments, Insider Monkey has unearthed a few investment strategies that have historically outstripped Mr. Market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Now, let’s take a glance at the fresh action regarding TerraForm Global Inc (NASDAQ:GLBL).
What have hedge funds been doing with TerraForm Global Inc (NASDAQ:GLBL)?
According to Insider Monkey’s hedge fund database, Omega Advisors, managed by Leon Cooperman, holds the largest position in TerraForm Global Inc (NASDAQ:GLBL). Omega Advisors has a $38.6 million position in the stock, comprising 0.8% of its 13F portfolio. On Omega Advisors’s heels is Jonathan Barrett and Paul Segal of Luminus Management, with a $26.8 million position; 0.8% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism consist of Larry Robbins’s Glenview Capital, Robert Pohly’s Samlyn Capital and Mark Kingdon’s Kingdon Capital.
As aggregate interest increased, specific money managers were breaking ground themselves. Omega Advisors, managed by Leon Cooperman, created the most valuable position in TerraForm Global Inc (NASDAQ:GLBL). Omega Advisors had $38.6 million invested in the company at the end of the quarter. Jonathan Barrett and Paul Segal’s Luminus Management also made a $26.8 million investment in the stock during the quarter. The following funds were also among the new GLBL investors: Larry Robbins’s Glenview Capital, Robert Pohly’s Samlyn Capital, and Mark Kingdon’s Kingdon Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TerraForm Global Inc (NASDAQ:GLBL) but similarly valued. These stocks are MiMedx Group Inc (NASDAQ:MDXG), American Woodmark Corporation (NASDAQ:AMWD), Sunrun Inc (NASDAQ:RUN), and Schweitzer-Mauduit International, Inc. (NYSE:SWM). This group of stocks’ market valuations resemble GLBL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDXG | 17 | 24004 | -5 |
| AMWD | 15 | 106150 | -5 |
| RUN | 14 | 159222 | 14 |
| SWM | 14 | 101110 | 3 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $98 million. That figure was $251 million in GLBL’s case. MiMedx Group Inc (NASDAQ:MDXG) is the most popular stock in this table. On the other hand Sunrun Inc (NASDAQ:RUN) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks TerraForm Global Inc (NASDAQ:GLBL) 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.
