As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Gain Capital Holdings Inc (NYSE:GCAP) in this article.
Gain Capital Holdings Inc (NYSE:GCAP) was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. GCAP shareholders have witnessed an increase in hedge fund interest of late. There were 16 hedge funds in our database with GCAP positions at the end of the previous quarter. At the end of this article we will also compare GCAP to other stocks including Clifton Savings Bancorp, Inc. (NASDAQ:CSBK), Sun Bancorp, Inc. /NJ (NASDAQ:SNBC), and Heidrick & Struggles International, Inc. (NASDAQ:HSII) to get a better sense of its popularity.
Follow Gain Capital Holdings Inc. (NYSE:GCAP)
Follow Gain Capital Holdings Inc. (NYSE:GCAP)
To the average investor there are a lot of gauges investors employ to appraise publicly traded companies. Some of the most innovative gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can trounce the broader indices by a superb margin (see the details here).
With all of this in mind, let’s take a look at the fresh action surrounding Gain Capital Holdings Inc (NYSE:GCAP).
What does the smart money think about Gain Capital Holdings Inc (NYSE:GCAP)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Richard Mashaal’s Rima Senvest Management has the largest position in Gain Capital Holdings Inc (NYSE:GCAP), worth close to $32.8 million, corresponding to 2.4% of its total 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which holds an $3.7 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other peers that are bullish comprise Jim Simons’s Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and D E Shaw.
As one would reasonably expect, specific money managers have been driving this bullishness. Ellington, managed by Mike Vranos, established the most valuable position in Gain Capital Holdings Inc (NYSE:GCAP). Ellington had $0.2 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made an $0.2 million investment in the stock during the quarter. The other funds with brand new GCAP positions are Peter Muller’s PDT Partners and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
Let’s now review hedge fund activity in other stocks similar to Gain Capital Holdings Inc (NYSE:GCAP). These stocks are Clifton Savings Bancorp, Inc. (NASDAQ:CSBK), Sun Bancorp, Inc. /NJ (NASDAQ:SNBC), Heidrick & Struggles International, Inc. (NASDAQ:HSII), and IXYS Corporation (NASDAQ:IXYS). This group of stocks’ market valuations are similar to GCAP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSBK | 11 | 44743 | 0 |
| SNBC | 5 | 105104 | 0 |
| HSII | 16 | 42022 | 4 |
| IXYS | 12 | 32899 | -4 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $48 million in GCAP’s case. Heidrick & Struggles International, Inc. (NASDAQ:HSII) is the most popular stock in this table. On the other hand Sun Bancorp, Inc. /NJ (NASDAQ:SNBC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Gain Capital Holdings Inc (NYSE:GCAP) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
