The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Goldman Sachs Group, Inc. (NYSE:GS).
Goldman Sachs Group, Inc. (NYSE:GS) was in 77 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 78. GS has seen an increase in support from the world’s most elite money managers of late. There were 76 hedge funds in our database with GS positions at the end of the fourth quarter. Our calculations also showed that GS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. Now we’re going to check out the fresh hedge fund action regarding Goldman Sachs Group, Inc. (NYSE:GS).
Do Hedge Funds Think GS Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 77 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 1% from the fourth quarter of 2020. By comparison, 74 hedge funds held shares or bullish call options in GS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Among these funds, Eagle Capital Management held the most valuable stake in Goldman Sachs Group, Inc. (NYSE:GS), which was worth $1563.4 million at the end of the fourth quarter. On the second spot was Greenhaven Associates which amassed $872.1 million worth of shares. Fisher Asset Management, Citadel Investment Group, and Millennium 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 Greenhaven Associates allocated the biggest weight to Goldman Sachs Group, Inc. (NYSE:GS), around 19.71% of its 13F portfolio. Truvvo Partners is also relatively very bullish on the stock, setting aside 5.6 percent of its 13F equity portfolio to GS.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Crake Asset Management, managed by Martin Taylor, established the most outsized position in Goldman Sachs Group, Inc. (NYSE:GS). Crake Asset Management had $51.7 million invested in the company at the end of the quarter. Rob Citrone’s Discovery Capital Management also initiated a $17.9 million position during the quarter. The following funds were also among the new GS investors: Kenneth Tropin’s Graham Capital Management, Kenneth Tropin’s Graham Capital Management, and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks similar to Goldman Sachs Group, Inc. (NYSE:GS). These stocks are 3M Company (NYSE:MMM), American Tower Corporation (NYSE:AMT), The Estee Lauder Companies Inc (NYSE:EL), Intuit Inc. (NASDAQ:INTU), Lockheed Martin Corporation (NYSE:LMT), Square, Inc. (NYSE:SQ), and Uber Technologies, Inc. (NYSE:UBER). This group of stocks’ market valuations are closest to GS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMM | 41 | 1519815 | -3 |
| AMT | 58 | 4593727 | -3 |
| EL | 59 | 4103128 | 8 |
| INTU | 68 | 4707761 | 0 |
| LMT | 50 | 2295448 | -3 |
| SQ | 92 | 9202246 | 3 |
| UBER | 130 | 10532866 | -5 |
| Average | 71.1 | 5279284 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 71.1 hedge funds with bullish positions and the average amount invested in these stocks was $5279 million. That figure was $5057 million in GS’s case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand 3M Company (NYSE:MMM) is the least popular one with only 41 bullish hedge fund positions. Goldman Sachs Group, Inc. (NYSE:GS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GS is 55.8. 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 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on GS as the stock returned 22.1% since the end of Q1 (through 8/6) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Goldman Sachs Group Inc (NYSE:GS)
Follow Goldman Sachs Group Inc (NYSE:GS)
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Disclosure: None. This article was originally published at Insider Monkey.
