Where Do Hedge Funds Stand On Globe Life Inc. (GL)?

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Globe Life Inc. (NYSE:GL)? The smart money sentiment can provide an answer to this question.

Is Globe Life Inc. (NYSE:GL) a splendid investment right now? Prominent investors were taking a bullish view. The number of long hedge fund positions moved up by 2 recently. Globe Life Inc. (NYSE:GL) was in 33 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 31 hedge funds in our database with GL positions at the end of the fourth quarter.

To the average investor there are dozens of signals stock traders use to evaluate stocks. Some of the most useful signals are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the elite investment managers can outperform their index-focused peers by a solid amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Ian Wace of Marshall Wace

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 let’s take a glance at the new hedge fund action encompassing Globe Life Inc. (NYSE:GL).

Do Hedge Funds Think GL Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GL over the last 23 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

More specifically, Berkshire Hathaway was the largest shareholder of Globe Life Inc. (NYSE:GL), with a stake worth $614 million reported as of the end of March. Trailing Berkshire Hathaway was D E Shaw, which amassed a stake valued at $23.7 million. Pzena Investment Management, Millennium Management, and Prana 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 MD Sass allocated the biggest weight to Globe Life Inc. (NYSE:GL), around 3.76% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, setting aside 2.82 percent of its 13F equity portfolio to GL.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in Globe Life Inc. (NYSE:GL). Arrowstreet Capital had $7.6 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $7.1 million position during the quarter. The following funds were also among the new GL investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Alec Litowitz and Ross Laser’s Magnetar Capital, and Qing Li’s Sciencast Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Globe Life Inc. (NYSE:GL) but similarly valued. We will take a look at Bunge Limited (NYSE:BG), The Gap Inc. (NYSE:GPS), Universal Display Corporation (NASDAQ:OLED), Playtika Holding Corp. (NASDAQ:PLTK), The Toro Company (NYSE:TTC), Booz Allen Hamilton Holding Corporation (NYSE:BAH), and BorgWarner Inc. (NYSE:BWA). This group of stocks’ market caps are closest to GL’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $567 million. That figure was $844 million in GL’s case. Bunge Limited (NYSE:BG) is the most popular stock in this table. On the other hand Universal Display Corporation (NASDAQ:OLED) is the least popular one with only 17 bullish hedge fund positions. Globe Life Inc. (NYSE:GL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GL is 66.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately GL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GL were disappointed as the stock returned -0.5% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.