Should You Buy Golub Capital BDC Inc (GBDC)?

As aggregate interest increased, some big names have jumped into Golub Capital BDC Inc (NASDAQ:GBDC) headfirst. D E Shaw, managed by D. E. Shaw, assembled the largest position in Golub Capital BDC Inc (NASDAQ:GBDC). D E Shaw had $0.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated an $0.6 million position during the quarter. The only other fund with a brand new GBDC position is Chao Ku’s Nine Chapters Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Golub Capital BDC Inc (NASDAQ:GBDC) but similarly valued. These stocks are Safety Insurance Group, Inc. (NASDAQ:SAFT), Calgon Carbon Corporation (NYSE:CCC), Inland Real Estate Corporation (NYSE:IRC), and GTT Communications Inc (NYSE:GTT). This group of stocks’ market caps are similar to GBDC’s market cap.

As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $22 million in GBDC’s case. GTT Communications Inc (NYSE:GTT) is the most popular stock in this table. On the other hand Safety Insurance Group, Inc. (NASDAQ:SAFT) is the least popular one with only 6 bullish hedge fund positions. Golub Capital BDC Inc (NASDAQ:GBDC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GTT might be a better candidate to consider a long position.