Blackstone / GSO Strategic Credit Fund (BGB): Hedge Funds Are Snapping Up

As aggregate interest increased, specific money managers have been driving this bullishness. Laurion Capital Management, managed by Benjamin A. Smith, initiated the biggest position in Blackstone / GSO Strategic Credit Fund (NYSE:BGB). Laurion Capital Management had $1.3 million invested in the company at the end of the quarter. Allan Teh’s Kamunting Street Capital also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new BGB position is Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Blackstone / GSO Strategic Credit Fund (NYSE:BGB) but similarly valued. We will take a look at Foundation Medicine Inc (NASDAQ:FMI), Quidel Corporation (NASDAQ:QDEL), Raven Industries, Inc. (NASDAQ:RAVN), and Chegg Inc (NYSE:CHGG). This group of stocks’ market values are similar to BGB’s market value.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $52 million, close to the $51 million in BGB’s case. Quidel Corporation (NASDAQ:QDEL) is the most popular stock in this table, while Foundation Medicine Inc (NASDAQ:FMI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Blackstone / GSO Strategic Credit Fund (NYSE:BGB) is even less popular than FMI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.