We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Gaming and Leisure Properties Inc (NASDAQ:GLPI) and determine whether hedge funds skillfully traded this stock.
Is Gaming and Leisure Properties Inc (NASDAQ:GLPI) going to take off soon? The best stock pickers were buying. The number of long hedge fund bets inched up by 6 recently. Our calculations also showed that GLPI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). GLPI was in 35 hedge funds’ portfolios at the end of March. There were 29 hedge funds in our database with GLPI positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most investors, hedge funds are perceived as slow, old financial vehicles of years past. While there are more than 8000 funds with their doors open today, Our experts hone in on the moguls of this club, around 850 funds. These investment experts watch over most of all hedge funds’ total capital, and by monitoring their best picks, Insider Monkey has come up with numerous investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s analyze the new hedge fund action encompassing Gaming and Leisure Properties Inc (NASDAQ:GLPI).
How are hedge funds trading Gaming and Leisure Properties Inc (NASDAQ:GLPI)?
At the end of the first quarter, a total of 35 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards GLPI over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Gaming and Leisure Properties Inc (NASDAQ:GLPI), which was worth $170.2 million at the end of the third quarter. On the second spot was Gates Capital Management which amassed $81.4 million worth of shares. Two Sigma Advisors, Cardinal Capital, and Eminence Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Covalent Capital Partners allocated the biggest weight to Gaming and Leisure Properties Inc (NASDAQ:GLPI), around 16.81% of its 13F portfolio. 1060 Capital Management is also relatively very bullish on the stock, designating 13.9 percent of its 13F equity portfolio to GLPI.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Eminence Capital, managed by Ricky Sandler, created the most outsized position in Gaming and Leisure Properties Inc (NASDAQ:GLPI). Eminence Capital had $29.1 million invested in the company at the end of the quarter. Paul Reeder and Edward Shapiro’s PAR Capital Management also initiated a $14.1 million position during the quarter. The following funds were also among the new GLPI investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jonathan Kolatch’s Redwood Capital Management, and Ed Bosek’s BeaconLight Capital.
Let’s also examine hedge fund activity in other stocks similar to Gaming and Leisure Properties Inc (NASDAQ:GLPI). We will take a look at Newell Brands Inc. (NYSE:NWL), Bright Horizons Family Solutions Inc (NYSE:BFAM), Sociedad Quimica y Minera (NYSE:SQM), and Amedisys Inc (NASDAQ:AMED). This group of stocks’ market values match GLPI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NWL | 24 | 1004534 | -7 |
| BFAM | 27 | 262204 | -7 |
| SQM | 10 | 53846 | -3 |
| AMED | 20 | 244124 | -2 |
| Average | 20.25 | 391177 | -4.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $391 million. That figure was $475 million in GLPI’s case. Bright Horizons Family Solutions Inc (NYSE:BFAM) is the most popular stock in this table. On the other hand Sociedad Quimica y Minera (NYSE:SQM) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Gaming and Leisure Properties Inc (NASDAQ:GLPI) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but still managed to beat the market by 15.5 percentage points. Hedge funds were also right about betting on GLPI, though not to the same extent, as the stock returned 25.4% in Q2 and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
