Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Gildan Activewear Inc (NYSE:GIL) based on that data.
Gildan Activewear Inc (NYSE:GIL) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that GIL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Saia Inc (NASDAQ:SAIA), Leggett & Platt, Inc. (NYSE:LEG), and Brooks Automation, Inc. (NASDAQ:BRKS) to gather more data points.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Glenn Welling of Engaged Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. With all of this in mind we’re going to check out the fresh hedge fund action regarding Gildan Activewear Inc (NYSE:GIL).
Do Hedge Funds Think GIL Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GIL over the last 23 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Pzena Investment Management held the most valuable stake in Gildan Activewear Inc (NYSE:GIL), which was worth $398 million at the end of the fourth quarter. On the second spot was Arrowstreet Capital which amassed $98.2 million worth of shares. Engaged Capital, Galibier Capital Management, and Hudson Way 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 Hudson Way Capital Management allocated the biggest weight to Gildan Activewear Inc (NYSE:GIL), around 5.65% of its 13F portfolio. Galibier Capital Management is also relatively very bullish on the stock, designating 5.15 percent of its 13F equity portfolio to GIL.
Because Gildan Activewear Inc (NYSE:GIL) has witnessed bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of hedgies that slashed their entire stakes heading into Q2. Intriguingly, Ronald Hua’s Qtron Investments dropped the biggest stake of the 750 funds followed by Insider Monkey, comprising about $0.4 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund said goodbye to about $0.2 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Gildan Activewear Inc (NYSE:GIL) but similarly valued. We will take a look at Saia Inc (NASDAQ:SAIA), Leggett & Platt, Inc. (NYSE:LEG), Brooks Automation, Inc. (NASDAQ:BRKS), Credit Acceptance Corp. (NASDAQ:CACC), Alcoa Corporation (NYSE:AA), LHC Group, Inc. (NASDAQ:LHCG), and Chindata Group Holdings Limited (NASDAQ:CD). This group of stocks’ market valuations resemble GIL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAIA | 16 | 420526 | 0 |
| LEG | 24 | 83229 | 4 |
| BRKS | 25 | 253750 | 0 |
| CACC | 23 | 544483 | -6 |
| AA | 38 | 1003019 | 5 |
| LHCG | 18 | 77772 | -7 |
| CD | 9 | 127683 | -3 |
| Average | 21.9 | 358637 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $359 million. That figure was $643 million in GIL’s case. Alcoa Corporation (NYSE:AA) is the most popular stock in this table. On the other hand Chindata Group Holdings Limited (NASDAQ:CD) is the least popular one with only 9 bullish hedge fund positions. Gildan Activewear Inc (NYSE:GIL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GIL is 37.7. 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 28.5% in 2021 through July 23rd and beat the market by 10.1 percentage points. A small number of hedge funds were also right about betting on GIL, though not to the same extent, as the stock returned 12.9% since the end of Q1 (through July 23rd) and outperformed the market.
Follow Gildan Activewear Inc (NYSE:GIL)
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Disclosure: None. This article was originally published at Insider Monkey.
