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Is GCP Applied Technologies Inc (GCP) Going to Burn These Hedge Funds?

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At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is GCP Applied Technologies Inc (NYSE:GCP) a buy, sell, or hold? The smart money is genuinely in a pessimistic mood. The number of bullish hedge fund bets that are revealed through the 13F filings decreased by 6 recently. There were 30 hedge funds in our database with GCP positions 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 Covanta Holding Corporation (NYSE:CVA), EXACT Sciences Corporation (NASDAQ:EXAS), and Universal Forest Products, Inc. (NASDAQ:UFPI) to gather more data points.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year, involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

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With all of this in mind, let’s go over the fresh action regarding GCP Applied Technologies Inc (NYSE:GCP).

How are hedge funds trading GCP Applied Technologies Inc (NYSE:GCP)?

Heading into the fourth quarter of 2016, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a plunge of 20% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in GCP heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

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According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Iridian Asset Management, led by David Cohen and Harold Levy, holds the most valuable position in GCP Applied Technologies Inc(NYSE:GCP). According to regulatory filings, the fund has a $162.5 million position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is Gates Capital Management, led by Jeffrey Gates, which holds a $93.1 million position; 3.4% of its 13F portfolio is allocated to the company. Some other members of the smart money that hold long positions contain Paul Marshall and Ian Wace’s Marshall Wace LLP, Phill Gross and Robert Atchinson’s Adage Capital Management and David S. Winter and David J. Millstone’s 40 North Management. We should note that Gates Capital Management is 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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