Do Hedge Funds Love Graphic Packaging Holding Company (GPK)?

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Graphic Packaging Holding Company (NYSE:GPK).

Is Graphic Packaging Holding Company (NYSE:GPK) ready to rally soon? The smart money was taking a bearish view. The number of long hedge fund bets dropped by 5 recently. Graphic Packaging Holding Company (NYSE:GPK) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 44. Our calculations also showed that GPK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 26 hedge funds in our database with GPK positions at the end of the fourth quarter.

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Do Hedge Funds Think GPK Is A Good Stock To Buy Now?

At the end of March, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GPK over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is GPK A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Ian Simm’s Impax Asset Management has the most valuable position in Graphic Packaging Holding Company (NYSE:GPK), worth close to $111.8 million, accounting for 0.6% of its total 13F portfolio. Coming in second is Brad Dunkley and Blair Levinsky of Waratah Capital Advisors, with a $77.6 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Ricky Sandler’s Eminence Capital, D. E. Shaw’s D E Shaw and Robert Joseph Caruso’s Select Equity Group. In terms of the portfolio weights assigned to each position 12th Street Asset Management allocated the biggest weight to Graphic Packaging Holding Company (NYSE:GPK), around 6.56% of its 13F portfolio. Waratah Capital Advisors is also relatively very bullish on the stock, designating 1.75 percent of its 13F equity portfolio to GPK.

Because Graphic Packaging Holding Company (NYSE:GPK) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of fund managers that slashed their full holdings by the end of the first quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the largest investment of all the hedgies followed by Insider Monkey, valued at about $30.8 million in stock. Robert Rodriguez and Steven Romick’s fund, First Pacific Advisors LLC, also dumped its stock, about $8.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 5 funds by the end of the first quarter.

Let’s also examine hedge fund activity in other stocks similar to Graphic Packaging Holding Company (NYSE:GPK). These stocks are Hawaiian Electric Industries, Inc. (NYSE:HE), SL Green Realty Corp (NYSE:SLG), Science Applications International Corp (NYSE:SAIC), Curtiss-Wright Corp. (NYSE:CW), Nomad Foods Limited (NYSE:NOMD), Lancaster Colony Corporation (NASDAQ:LANC), and Nevro Corp (NYSE:NVRO). All of these stocks’ market caps resemble GPK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HE 12 196022 -6
SLG 21 162062 -1
SAIC 18 207548 -10
CW 22 208527 -1
NOMD 25 324331 -3
LANC 22 246061 3
NVRO 29 649613 -1
Average 21.3 284881 -2.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $285 million. That figure was $477 million in GPK’s case. Nevro Corp (NYSE:NVRO) is the most popular stock in this table. On the other hand Hawaiian Electric Industries, Inc. (NYSE:HE) is the least popular one with only 12 bullish hedge fund positions. Graphic Packaging Holding Company (NYSE:GPK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GPK is 40.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately GPK wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GPK investors were disappointed as the stock returned -4.5% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.