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Is Granite Construction Inc. (GVA) Going to Burn These Hedge Funds?

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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Granite Construction Inc. (NYSE:GVA).

Granite Construction Inc. (NYSE:GVA) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds’ portfolios at the end of September. 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 American Assets Trust, Inc (NYSE:AAT), Pattern Energy Group Inc (NASDAQ:PEGI), and Rice Midstream Partners LP(NYSE:RMP) to gather more data points.

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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

Thanapun/Shutterstock.com

Thanapun/Shutterstock.com

What have hedge funds been doing with Granite Construction Inc. (NYSE:GVA)?

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, same as in the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in GVA over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

HedgeFundSentimentChart

When looking at the institutional investors followed by Insider Monkey, Principal Global Investors’ Columbus Circle Investors has the number one position in Granite Construction Inc. (NYSE:GVA), worth close to $23.3 million. Coming in second is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $18.7 million position. Some other hedge funds and institutional investors with similar optimism include Peter Schliemann’s Rutabaga Capital Management, Anand Parekh’s Alyeska Investment Group and John Croghan and Richard Fradin’s Rail-Splitter 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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