GoPro Inc (GPRO): Why is Smart Money Abandoning the Company?

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How have hedgies been trading GoPro Inc (NASDAQ:GPRO)?

At Q4’s end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a 28% fall from the third quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or had already accumulated large positions).

According to Insider Monkey’s hedge fund database, Philippe Laffont’s Coatue Management has the most valuable position in GoPro Inc (NASDAQ:GPRO), worth close to $47.1 million, amounting to 0.5% of its total 13F portfolio. The second largest stake is held by Sageview Capital, managed by Edward Gilhuly and Scott Stuart, which holds a $30.6 million position; 15.3% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions include Eric Chen’s Antipodean Advisors, John Griffin’s Blue Ridge Capital, and John Lykouretzos’ Hoplite Capital Management.

Because GoPro Inc (NASDAQ:GPRO) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds that elected to cut their positions entirely in the third quarter. Intriguingly, Glenn Russell Dubin’s Highbridge Capital Management said goodbye to the largest investment of the 800 funds followed by Insider Monkey, worth close to $26 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also cut its stock, about $18.1 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 7 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to GoPro Inc (NASDAQ:GPRO). We will take a look at PIMCO Dynamic Credit Income Fund (NYSE:PCI), BGC Partners, Inc. (NASDAQ:BGCP), RSP Permian Inc (NYSE:RSPP), and IMAX Corporation (USA) (NYSE:IMAX). This group of stocks’ market values match GPRO’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PCI 7 51259 1
BGCP 17 136547 -1
RSPP 23 294185 3
IMAX 19 154545 -1

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $237 million in GPRO’s case. RSP Permian Inc (NYSE:RSPP) is the most popular stock in this table. On the other hand PIMCO Dynamic Credit Income Fund (NYSE:PCI) is the least popular one with only 7 bullish hedge fund positions. GoPro Inc (NASDAQ:GPRO) 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 exhibiting positive recent sentiment towards. In this regard, we don’t think GoPro qualifies as a good purchase at this time.

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