Is Greif, Inc. (NYSE:GEF) a great stock to buy now? Hedge funds are in a bullish mood. The number of bullish hedge fund bets rose by 2 in recent months.
According to most investors, hedge funds are seen as slow, old investment vehicles of years past. While there are more than 8000 funds in operation at present, we hone in on the leaders of this group, around 450 funds. It is widely believed that this group oversees most of all hedge funds’ total asset base, and by paying attention to their best picks, we have formulated a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as key, bullish insider trading sentiment is another way to parse down the marketplace. Obviously, there are plenty of stimuli for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this method if you understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the latest action regarding Greif, Inc. (NYSE:GEF).
What have hedge funds been doing with Greif, Inc. (NYSE:GEF)?
In preparation for this year, a total of 13 of the hedge funds we track were long in this stock, a change of 18% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in Greif, Inc. (NYSE:GEF), worth close to $65 million, accounting for 0.2% of its total 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $39 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Joel Greenblatt’s Gotham Asset Management.
With a general bullishness amongst the heavyweights, some big names have jumped into Greif, Inc. (NYSE:GEF) headfirst. Hutchin Hill Capital, managed by Neil Chriss, initiated the largest position in Greif, Inc. (NYSE:GEF). Hutchin Hill Capital had 2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $2 million investment in the stock during the quarter. The only other fund with a new position in the stock is John Fichthorn’s Dialectic Capital Management.
How have insiders been trading Greif, Inc. (NYSE:GEF)?
Insider buying is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time frame, Greif, Inc. (NYSE:GEF) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Greif, Inc. (NYSE:GEF). These stocks are Bemis Company, Inc. (NYSE:BMS), AptarGroup, Inc. (NYSE:ATR), Sonoco Products Company (NYSE:SON), Silgan Holdings Inc. (NASDAQ:SLGN), and Graphic Packaging Holding Company (NYSE:GPK). All of these stocks are in the packaging & containers industry and their market caps are closest to GEF’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Bemis Company, Inc. (NYSE:BMS)||11||0||2|
|AptarGroup, Inc. (NYSE:ATR)||9||1||6|
|Sonoco Products Company (NYSE:SON)||16||0||8|
|Silgan Holdings Inc. (NASDAQ:SLGN)||14||0||6|
|Graphic Packaging Holding Company (NYSE:GPK)||18||0||9|
With the results shown by Insider Monkey’s strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Greif, Inc. (NYSE:GEF) is an important part of this process.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.