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Do Hedge Funds Really Like Great Southern Bancorp, Inc. (GSBC)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtGreat Southern Bancorp, Inc. (NASDAQ:GSBC) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

Is Great Southern Bancorp, Inc. (NASDAQ:GSBC) a bargain? Prominent investors were becoming more confident. The number of bullish hedge fund positions went up by 3 recently. Our calculations also showed that GSBC 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).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most market participants, hedge funds are perceived as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds trading at present, We look at the masters of this club, approximately 850 funds. Most estimates calculate that this group of people administer the majority of the hedge fund industry’s total asset base, and by shadowing their first-class equity investments, Insider Monkey has found a few investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum 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 .

Ken Griffin CITADEL INVESTMENT GROUP

Ken Griffin of Citadel Investment Group

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 we’re going to take a look at the latest hedge fund action surrounding Great Southern Bancorp, Inc. (NASDAQ:GSBC).

How have hedgies been trading Great Southern Bancorp, Inc. (NASDAQ:GSBC)?

Heading into the second quarter of 2020, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GSBC over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Great Southern Bancorp, Inc. (NASDAQ:GSBC), with a stake worth $15.7 million reported as of the end of September. Trailing Renaissance Technologies was Millennium Management, which amassed a stake valued at $4 million. AQR Capital Management, Arrowstreet Capital, and Two Sigma Advisors 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 Zebra Capital Management allocated the biggest weight to Great Southern Bancorp, Inc. (NASDAQ:GSBC), around 0.38% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, setting aside 0.03 percent of its 13F equity portfolio to GSBC.

As one would reasonably expect, some big names have been driving this bullishness. Engineers Gate Manager, managed by Greg Eisner, created the most outsized position in Great Southern Bancorp, Inc. (NASDAQ:GSBC). Engineers Gate Manager had $0.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.3 million position during the quarter. The only other fund with a new position in the stock is Richard Driehaus’s Driehaus Capital.

Let’s now review hedge fund activity in other stocks similar to Great Southern Bancorp, Inc. (NASDAQ:GSBC). We will take a look at Precigen, Inc. (NASDAQ:PGEN), Ladder Capital Corp (NYSE:LADR), Collier Creek Holdings (NYSE:CCH), and Nicolet Bankshares Inc. (NASDAQ:NCBS). This group of stocks’ market valuations are similar to GSBC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PGEN 13 36340 3
LADR 17 27489 6
CCH 14 125059 -2
NCBS 5 5413 0
Average 12.25 48575 1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $30 million in GSBC’s case. Ladder Capital Corp (NYSE:LADR) is the most popular stock in this table. On the other hand Nicolet Bankshares Inc. (NASDAQ:NCBS) is the least popular one with only 5 bullish hedge fund positions. Great Southern Bancorp, Inc. (NASDAQ:GSBC) 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. 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 and surpassed the market by 15.5 percentage points. Unfortunately GSBC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); GSBC investors were disappointed as the stock returned 0.8% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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