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Is Garrison Capital Inc (GARS) A Good Stock To Buy?

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Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Garrison Capital Inc (NASDAQ:GARS).

Garrison Capital Inc (NASDAQ:GARS) has experienced a decrease in hedge fund interest lately. What is even more interesting is that the shares of Garrison Capital Inc (NASDAQ:GARS) experienced a similar trading sentiment, dropping 8.67% throughout the quarter. However, the same cannot be accredited for the hedge fund behavior, and to get a better idea, we will cover hedge funds that held stake in the company, at the end of the last 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 Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), Proteon Therapeutics Inc (NASDAQ:PRTO), and Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM) to gather more data points.

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If you’d ask most market participants, hedge funds are seen as underperforming, old financial vehicles of the past. While there are more than 8000 funds trading at present, Our experts hone in on the upper echelon of this group, about 700 funds. Most estimates calculate that this group of people orchestrates bulk of the hedge fund industry’s total asset base, and by monitoring their inimitable stock picks, Insider Monkey has unearthed numerous investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, we’re going to analyze the key action regarding Garrison Capital Inc (NASDAQ:GARS).

How have hedgies been trading Garrison Capital Inc (NASDAQ:GARS)?

At the end of Q3, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 17% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert B. Gillam’s McKinley Capital Management has the number one position in Garrison Capital Inc (NASDAQ:GARS), worth close to $1.1 million, accounting for 0.1% of its total 13F portfolio. The second most bullish fund manager is John Overdeck and David Siegel of Two Sigma Advisors, with a $0.9 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions include Israel Englander’s Millennium Management, Chao Ku’s Nine Chapters Capital Management, and D E Shaw.

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