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How Gerdau SA (ADR) (GGB) Stacks Up Against Its Peers?

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Is Gerdau SA (ADR) (NYSE:GGB) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

Gerdau SA (ADR) (NYSE:GGB) shareholders have witnessed a decrease in enthusiasm from smart money lately. GGB was in 11 hedge funds’ portfolios at the end of the third quarter of 2016. There were 13 hedge funds in our database with GGB holdings at the end of the previous quarter. 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 Blue Buffalo Pet Products Inc (NASDAQ:BUFF), Enel Chile SA – ADR(NYSE:ENIC), and HEICO Corporation (NYSE:HEI) to gather more data points.

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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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What have hedge funds been doing with Gerdau SA (ADR) (NYSE:GGB)?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 15% from the second quarter of 2016. On the other hand, there were a total of 10 hedge funds with a bullish position in GGB at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

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Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world,, holds the number one position in Gerdau SA (ADR) (NYSE:GGB). Renaissance Technologies has a $59.8 million position in the stock. Coming in second is Contrarian Capital, led by Jon Bauer, holding a $29.2 million position; 13.9% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism encompass Howard Marks’ Oaktree Capital Management, Israel Englander’s Millennium Management and Glenn Russell Dubin’s Highbridge Capital Management. 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.

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