Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards GlaxoSmithKline plc (NYSE:GSK) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Is GlaxoSmithKline plc (NYSE:GSK) an excellent investment today? Hedge funds were taking an optimistic view. The number of long hedge fund bets rose by 3 lately. GlaxoSmithKline plc (NYSE:GSK) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that GSK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 28 hedge funds in our database with GSK positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s take a gander at the latest hedge fund action encompassing GlaxoSmithKline plc (NYSE:GSK).
Gavin Saitowitz of Prelude Capital
Do Hedge Funds Think GSK Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards GSK over the last 25 quarters. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of GlaxoSmithKline plc (NYSE:GSK), with a stake worth $681.3 million reported as of the end of September. Trailing Fisher Asset Management was Renaissance Technologies, which amassed a stake valued at $359.7 million. Arrowstreet Capital, Two Sigma Advisors, and Camber Capital 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 Healthcare Value Capital allocated the biggest weight to GlaxoSmithKline plc (NYSE:GSK), around 7.54% of its 13F portfolio. Kahn Brothers is also relatively very bullish on the stock, earmarking 7.28 percent of its 13F equity portfolio to GSK.
Now, specific money managers have jumped into GlaxoSmithKline plc (NYSE:GSK) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, established the largest position in GlaxoSmithKline plc (NYSE:GSK). Balyasny Asset Management had $19.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $13.4 million investment in the stock during the quarter. The following funds were also among the new GSK investors: Matthew Mark’s Jet Capital Investors, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).
Let’s now take a look at hedge fund activity in other stocks similar to GlaxoSmithKline plc (NYSE:GSK). These stocks are Lockheed Martin Corporation (NYSE:LMT), Infosys Limited (NYSE:INFY), Prologis Inc (NYSE:PLD), Zoetis Inc (NYSE:ZTS), BP plc (NYSE:BP), Snowflake Inc (NYSE:SNOW), and Anthem Inc (NYSE:ANTM). This group of stocks’ market valuations resemble GSK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LMT | 51 | 1284495 | -7 |
| INFY | 29 | 2473668 | 7 |
| PLD | 32 | 483464 | -8 |
| ZTS | 58 | 2713394 | 0 |
| BP | 29 | 1053236 | -1 |
| SNOW | 73 | 14569929 | 3 |
| ANTM | 59 | 4585560 | -8 |
| Average | 47.3 | 3880535 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 47.3 hedge funds with bullish positions and the average amount invested in these stocks was $3881 million. That figure was $1659 million in GSK’s case. Snowflake Inc (NYSE:SNOW) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 29 bullish hedge fund positions. GlaxoSmithKline plc (NYSE:GSK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GSK is 36.8. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on GSK as the stock returned 18.8% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
Follow Glaxosmithkline Plc (NYSE:GSK)
Follow Glaxosmithkline Plc (NYSE:GSK)
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Disclosure: None. This article was originally published at Insider Monkey.
