Do Hedge Funds Love P.H. Glatfelter Company (GLT)?

There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze P.H. Glatfelter Company (NYSE:GLT) .

P.H. Glatfelter Company (NYSE:GLT) investors should be aware of a decrease in activity from the world’s largest hedge funds recently. There were 11 hedge funds in our database with GLT holdings at the end of September. 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 Smart & Final Stores Inc (NYSE:SFS), MiMedx Group Inc (NASDAQ:MDXG), and Compass Diversified Holdings (NYSE:CODI) to gather more data points.

We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

Now, we’re going to take a peek at the recent action encompassing P.H. Glatfelter Company (NYSE:GLT).

What does the smart money think about P.H. Glatfelter Company (NYSE:GLT)?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in GLT at the beginning of this year. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holds the largest position in P.H. Glatfelter Company (NYSE:GLT). Arrowstreet Capital has a $6.2 million position in the stock, comprising less than 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $2.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass Ken Griffin’s Citadel Investment Group, Roger Ibbotson’s Zebra Capital Management and Renaissance Technologies, one of the largest hedge funds in the world. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that sold off their entire stakes in the stock during the third quarter. It’s worth mentioning that Martin Whitman’s Third Avenue Management sold off the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $0.9 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund cut about $0.2 million worth of shares.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as P.H. Glatfelter Company (NYSE:GLT) but similarly valued. We will take a look at Smart & Final Stores Inc (NYSE:SFS), MiMedx Group Inc (NASDAQ:MDXG), Compass Diversified Holdings (NYSE:CODI), and Maiden Holdings, Ltd. (NASDAQ:MHLD). This group of stocks’ market valuations resemble GLT’s market valuation.

As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $14 million in GLT’s case. Maiden Holdings, Ltd. (NASDAQ:MHLD) is the most popular stock in this table. On the other hand Compass Diversified Holdings (NYSE:CODI) is the least popular one with only 6 bullish hedge fund positions. P.H. Glatfelter Company (NYSE:GLT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MHLD might be a better candidate to consider taking a long position in.

Disclosure: None