Here is What Hedge Funds Think About GoPro Inc (GPRO)

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in GoPro Inc (NASDAQ:GPRO)? The smart money sentiment can provide an answer to this question.

GoPro Inc (NASDAQ:GPRO) shareholders have witnessed an increase in hedge fund sentiment lately. 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 AECOM Technology Corp (NYSE:ACM), AptarGroup, Inc. (NYSE:ATR), and Alere Inc (NYSE:ALR) to gather more data points.

According to most investors, hedge funds are seen as worthless, old financial tools of yesteryear. While there are more than 8000 funds trading at present, our experts look at the leaders of this group, approximately 700 funds. These hedge fund managers direct the lion’s share of the hedge fund industry’s total capital, and by watching their finest equity investments, Insider Monkey has discovered numerous investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, we’re going to check out the recent action surrounding GoPro Inc (NASDAQ:GPRO).

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

Heading into Q4, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 19% from the second quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Edward Gilhuly and Scott Stuart’s Sageview Capital has the biggest position in GoPro Inc (NASDAQ:GPRO), worth close to $53.1 million, corresponding to 20% of its total 13F portfolio. The second most bullish fund manager is D E Shaw, which holds a $30.8 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Glenn Russell Dubin’s Highbridge Capital Management, Joel Greenblatt’s Gotham Asset Management, and Ken Griffin’s Citadel Investment Group.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Highbridge Capital Management, managed by Glenn Russell Dubin, created the biggest position in GoPro Inc (NASDAQ:GPRO). Highbridge Capital Management had $26 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made an $18.1 million investment in the stock during the quarter. The other funds with new positions in the stock are John Lykouretzos’ Hoplite Capital Management, Mike Masters’ Masters Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as GoPro Inc (NASDAQ:GPRO) but similarly valued. We will take a look at AECOM Technology Corp (NYSE:ACM), AptarGroup, Inc. (NYSE:ATR), Alere Inc (NYSE:ALR), and Arista Networks Inc (NYSE:ANET). This group of stocks’ market valuations matches GoPro Inc (NASDAQ:GPRO)’s market valuation.

As you can see, these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $532 million. That figure was $240 million in GoPro Inc (NASDAQ:GPRO)’s case. Alere Inc (NYSE:ALR) is the most popular stock in this table. On the other hand, AptarGroup, Inc. (NYSE:ATR) is the least popular one with only 18 bullish hedge fund positions. GoPro Inc (NASDAQ:GPRO) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Alere Inc (NYSE:ALR) might be a better candidate to consider a long position.