Is GNC Holdings Inc (NYSE:GNC) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2-and-20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform poorly at times, but their consensus picks have historically outperformed the market after risk adjustments.
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GNC Holdings Inc (NYSE:GNC) shareholders have witnessed an increase in enthusiasm from smart money in recent months, with the number of shareholders of the company in our database ticking up to 42. 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 Hanover Insurance Group, Inc. (NYSE:THG), Extended Stay America Inc (NYSE:STAY), and J2 Global Inc (NASDAQ:JCOM) to gather more data points.
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To most traders, hedge funds are viewed as unimportant, old investment vehicles of yesteryear. While there are greater than 8,000 funds trading today, hedge fund experts at Insider Monkey look at the leaders of this club, around 700 funds. It is estimated that this group of investors control most of the smart money’s total asset base, and by tailing their finest picks, Insider Monkey has come up with a few investment strategies that have historically defeated the market. Insider Monkey’s small-cap hedge fund strategy outran the S&P 500 index by 12 percentage points a year for a decade in its backtests.
With all of this in mind, let’s check out the latest action regarding GNC Holdings Inc (NYSE:GNC).
What does the smart money think about GNC Holdings Inc (NYSE:GNC)?
Heading into Q4, a total of 42 of the hedge funds tracked by Insider Monkey were bullish in this stock, an increase of 5% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund holdings data compiled by Insider Monkey, Ricky Sandler’s Eminence Capital has the number one position in GNC Holdings Inc (NYSE:GNC), worth close to $209.7 million, comprising 3.2% of its total 13F portfolio. Coming in second is TPG-AXON Management LP, led by Dinakar Singh, holding a $144.3 million position; 11.2% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish include Robert Pohly’s Samlyn Capital, and Stephen V. Raneri’s LionEye Capital Management.
With general bullishness amongst the heavyweights, some big names were breaking ground themselves. Amici Capital, managed by Paul Orlin and Alex Porter, initiated the most outsized position in GNC Holdings Inc (NYSE:GNC). Amici Capital had $32.9 million newly-invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $24.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael R. Weisberg’s Crestwood Capital Management, Clifford Fox’s Columbus Circle Investors, and Chao Ku’s Nine Chapters Capital Management.
Let’s also examine hedge fund activity in other stocks similar to GNC Holdings Inc (NYSE:GNC). These stocks are The Hanover Insurance Group, Inc. (NYSE:THG), Extended Stay America Inc (NYSE:STAY), J2 Global Inc (NASDAQ:JCOM), and PAREXEL International Corporation (NASDAQ:PRXL). All of these stocks’ market caps match Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| THG | 20 | 164406 | 4 |
| STAY | 16 | 1685498 | 3 |
| JCOM | 14 | 116950 | 1 |
| PRXL | 13 | 306752 | -8 |
As you can see these stocks had an average of 15,75 hedge funds with bullish positions and the average amount invested in these stocks was $568 million, while the amount invested in GNC was $1.17 billion. The Hanover Insurance Group, Inc. (NYSE:THG) is the most popular stock in this table. On the other hand PAREXEL International Corporation (NASDAQ:PRXL) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks GNC Holdings Inc (NYSE:GNC) is more popular among hedge funds. Considering that hedge funds are fond of this stock, owning 34.20% of its shares, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
