The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards GoPro Inc (NASDAQ:GPRO) .
Is GoPro Inc (NASDAQ:GPRO) a buy here? Hedge funds seem to be taking a bullish view, since the number of bullish hedge fund investments increased by four in the third quarter. In this way, there were 20 funds in our database with GPRO positions at the end of September. At the end of this article we will also compare GPRO to other stocks, including Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), The Empire District Electric Company (NYSE:EDE), and WMS Industries Inc. (NYSE:WMS) to get a better sense of its popularity.
Follow Gopro Inc. (NASDAQ:GPRO)
Follow Gopro Inc. (NASDAQ:GPRO)
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.
Nenov Brothers Images / Shutterstock.com
Now, we’re going to take a look at the recent action encompassing GoPro Inc (NASDAQ:GPRO).
How have hedgies been trading GoPro Inc (NASDAQ:GPRO)?
During the third quarter, the number of funds tracked by Insider Monkey bullish on GoPro increased by 25% to 20. Below, you can check out the change in hedge fund sentiment towards GPRO over the last five quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Blue Ridge Capital, led by John Griffin, holds the most valuable position in GoPro Inc (NASDAQ:GPRO). Blue Ridge Capital has a $32.1 million position in the stock, comprising 0.4% of its 13F portfolio. On Blue Ridge Capital’s heels is D. E. Shaw’s D E Shaw, with a $21.8 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism contain Edward Gilhuly and Scott Stuart’s Sageview Capital, and Gabriel Plotkin’s Melvin 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.
Consequently, key money managers were leading the bulls’ herd. Citadel Investment Group, led by Ken Griffin, established the most valuable call position in GoPro Inc (NASDAQ:GPRO). Citadel Investment Group had $16.6 million invested in the company at the end of the quarter. Gabriel Plotkin’s Melvin Capital Management also initiated a $12.5 million position during the quarter. The other funds with brand new GPRO positions are Beeneet Kothari’s Tekne Capital Management, Matthew A. Weatherbie’s Weatherbie Capital, and Peter Muller’s PDT Partners.
Let’s now take a look at 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 Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), The Empire District Electric Company (NYSE:EDE), WMS Industries Inc. (NYSE:WMS), and Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). This group of stocks’ market values are closest to GPRO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OLLI | 22 | 182940 | 3 |
| EDE | 7 | 116219 | -3 |
| WMS | 13 | 312542 | 2 |
| LXRX | 18 | 113394 | 1 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $181 million, compared to $165 million in GPRO’s case. Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) is the most popular stock in this table. On the other hand, The Empire District Electric Company (NYSE:EDE) is the least popular one with only seven investors holding shares. GoPro Inc (NASDAQ:GPRO) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) might be a better candidate to consider taking a long position in.
