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Have Hedge Funds Uncovered A Hidden Gem in Gogo Inc (GOGO)?

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The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Gogo Inc (NASDAQ:GOGO).

Is Gogo Inc (NASDAQ:GOGO) a healthy stock for your portfolio? The smart money is becoming hopeful. The number of long hedge fund bets rose by 5 lately. GOGO was in 21 hedge funds’ portfolios at the end of the third quarter of 2016. There were 16 hedge funds in our database with GOGO positions at the end of the previous quarter. At the end of this article we will also compare GOGO to other stocks including Kelly Services, Inc. (NASDAQ:KELYA), Oritani Financial Corp. (NASDAQ:ORIT), and A. Schulman Inc (NASDAQ:SHLM) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Hedge fund activity in Gogo Inc (NASDAQ:GOGO)

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 31% rise from one quarter earlier, lifting the stock’s ownership among hedge funds to a yearly high. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

HedgeFundSentimentChart

When looking at the institutional investors followed by Insider Monkey, Stelliam Investment Management, managed by Ross Margolies, holds the number one position in Gogo Inc (NASDAQ:GOGO). Stelliam Investment Management has an $87.2 million position in the stock, comprising 2.9% of its 13F portfolio. Sitting at the No. 2 spot is Valinor Management LLC, led by David Gallo, holding a $40.3 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish comprise Eric F. Billings’ Billings Capital Management, Pasco Alfaro / Richard Tumure’s Miura Global Management and Mario Gabelli’s GAMCO Investors.

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