General Motors Company (NYSE:GM) has seen an increase in hedge fund interest in recent months. General Motors Company (NYSE:GM) was in 69 hedge funds’ portfolios at the end of June. The all time high for this statistics is 88. There were 53 hedge funds in our database with GM holdings at the end of March. Our calculations also showed that GM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
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 56 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.
Boykin Curry of Eagle Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than quadrupled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Keeping this in mind let’s analyze the fresh hedge fund action encompassing General Motors Company (NYSE:GM).
What have hedge funds been doing with General Motors Company (NYSE:GM)?
Heading into the third quarter of 2020, a total of 69 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the first quarter of 2020. On the other hand, there were a total of 49 hedge funds with a bullish position in GM a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in General Motors Company (NYSE:GM) was held by Berkshire Hathaway, which reported holding $1889.4 million worth of stock at the end of September. It was followed by Eagle Capital Management with a $481.9 million position. Other investors bullish on the company included Greenhaven Associates, Arrowstreet Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Greenhaven Associates allocated the biggest weight to General Motors Company (NYSE:GM), around 7.88% of its 13F portfolio. Oldfield Partners is also relatively very bullish on the stock, designating 6.19 percent of its 13F equity portfolio to GM.
Now, key hedge funds have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, established the most valuable position in General Motors Company (NYSE:GM). Point72 Asset Management had $53.5 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also made a $13.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Gregg Moskowitz’s Interval Partners, Seth Wunder’s Black-and-White Capital, and Javier Velazquez’s Albar Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as General Motors Company (NYSE:GM) but similarly valued. We will take a look at Exelon Corporation (NASDAQ:EXC), Veeva Systems Inc (NYSE:VEEV), Eaton Corporation plc (NYSE:ETN), Las Vegas Sands Corp. (NYSE:LVS), Canadian Pacific Railway Limited (NYSE:CP), Eni SpA (NYSE:E), and Kinder Morgan Inc (NYSE:KMI). This group of stocks’ market values are closest to GM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXC | 30 | 772535 | -3 |
| VEEV | 35 | 529727 | 2 |
| ETN | 34 | 560308 | -1 |
| LVS | 47 | 2396746 | 5 |
| CP | 36 | 1635509 | 4 |
| E | 8 | 43125 | 3 |
| KMI | 50 | 1090828 | 3 |
| Average | 34.3 | 1004111 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.3 hedge funds with bullish positions and the average amount invested in these stocks was $1004 million. That figure was $4380 million in GM’s case. Kinder Morgan Inc (NYSE:KMI) is the most popular stock in this table. On the other hand Eni SpA (NYSE:E) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks General Motors Company (NYSE:GM) is more popular among hedge funds. Our overall hedge fund sentiment score for GM is 83.5. 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 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 returned 29.2% in 2020 through October 16th but still managed to beat the market by 19.7 percentage points. Hedge funds were also right about betting on GM as the stock returned 32.2% since the end of June (through 10/16) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
