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Do Hedge Funds Love Group 1 Automotive, Inc. (GPI)?

We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Group 1 Automotive, Inc. (NYSE:GPI) based on that data.

Is Group 1 Automotive, Inc. (NYSE:GPI) going to take off soon? Money managers are turning bullish. The number of bullish hedge fund positions moved up by 4 recently. Our calculations also showed that GPI isn’t among the 30 most popular stocks among hedge funds. GPI was in 13 hedge funds’ portfolios at the end of the first quarter of 2019. There were 9 hedge funds in our database with GPI positions at the end of the previous quarter.

At the moment there are numerous methods investors use to assess stocks. A duo of the most underrated methods are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a healthy amount (see the details here).

Ricky Sandler, Eminence Capital

Let’s check out the key hedge fund action regarding Group 1 Automotive, Inc. (NYSE:GPI).

What does smart money think about Group 1 Automotive, Inc. (NYSE:GPI)?

Heading into the second quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 44% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GPI over the last 15 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

GPI_jun2019

More specifically, Eminence Capital was the largest shareholder of Group 1 Automotive, Inc. (NYSE:GPI), with a stake worth $73.1 million reported as of the end of March. Trailing Eminence Capital was Citadel Investment Group, which amassed a stake valued at $18 million. Tyvor Capital, Adage Capital Management, and Marshall Wace LLP were also very fond of the stock, giving the stock large weights in their portfolios.

As aggregate interest increased, specific money managers have jumped into Group 1 Automotive, Inc. (NYSE:GPI) headfirst. Scopus Asset Management, managed by Alexander Mitchell, assembled the most valuable position in Group 1 Automotive, Inc. (NYSE:GPI). Scopus Asset Management had $4.5 million invested in the company at the end of the quarter. Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital also initiated a $3.7 million position during the quarter. The following funds were also among the new GPI investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Matthew Hulsizer’s PEAK6 Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Group 1 Automotive, Inc. (NYSE:GPI) but similarly valued. These stocks are KKR Real Estate Finance Trust Inc. (NYSE:KREF), Accelerate Diagnostics Inc (NASDAQ:AXDX), Matthews International Corp (NASDAQ:MATW), and Helix Energy Solutions Group Inc. (NYSE:HLX). All of these stocks’ market caps are closest to GPI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KREF 9 42594 1
AXDX 11 66192 6
MATW 12 43871 0
HLX 16 66120 -2
Average 12 54694 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $148 million in GPI’s case. Helix Energy Solutions Group Inc. (NYSE:HLX) is the most popular stock in this table. On the other hand KKR Real Estate Finance Trust Inc. (NYSE:KREF) is the least popular one with only 9 bullish hedge fund positions. Group 1 Automotive, Inc. (NYSE:GPI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on GPI as the stock returned 21.3% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

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

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