We are still in an overall bull market and many stocks that smart money investors were piling into surged through November 22nd. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 52% and 49% respectively. Hedge funds’ top 3 stock picks returned 39.1% this year and beat the S&P 500 ETFs by nearly 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like The Goldfield Corporation (NYSE:GV).
The Goldfield Corporation (NYSE:GV) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of the third quarter of 2019. At the end of this article we will also compare GV to other stocks including Tarena International Inc (NASDAQ:TEDU), Core Molding Technologies, Inc. (NYSE:CMT), and Educational Development Corporation (NASDAQ:EDUC) to get a better sense of its popularity.
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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.
Jim Simons Founder of Renaissance Technologies
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s view the key hedge fund action encompassing The Goldfield Corporation (NYSE:GV).
What does smart money think about The Goldfield Corporation (NYSE:GV)?
At Q3’s end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GV over the last 17 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Mill Road Capital Management was the largest shareholder of The Goldfield Corporation (NYSE:GV), with a stake worth $4.8 million reported as of the end of September. Trailing Mill Road Capital Management was Renaissance Technologies, which amassed a stake valued at $4 million. PDT Partners was 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 Mill Road Capital Management allocated the biggest weight to The Goldfield Corporation (NYSE:GV), around 7.72% of its portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0034 percent of its 13F equity portfolio to GV.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks similar to The Goldfield Corporation (NYSE:GV). We will take a look at Tarena International Inc (NASDAQ:TEDU), Core Molding Technologies, Inc. (NYSE:CMT), Educational Development Corporation (NASDAQ:EDUC), and Alio Gold Inc. (NYSE:ALO). This group of stocks’ market caps resemble GV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEDU | 4 | 1150 | -3 |
| CMT | 4 | 9567 | 0 |
| EDUC | 1 | 1323 | 0 |
| ALO | 3 | 1856 | 0 |
| Average | 3 | 3474 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $9 million in GV’s case. Tarena International Inc (NASDAQ:TEDU) is the most popular stock in this table. On the other hand Educational Development Corporation (NASDAQ:EDUC) is the least popular one with only 1 bullish hedge fund positions. The Goldfield Corporation (NYSE:GV) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. A small number of hedge funds were also right about betting on GV as the stock returned 20.5% during Q4 (through 11/22) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.