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Gildan Activewear Inc (GIL): Hedge Funds Sticking Around

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Gildan Activewear Inc (NYSE:GIL).

Gildan Activewear Inc (NYSE:GIL) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 22 hedge funds’ portfolios at the end of the first quarter of 2020. At the end of this article we will also compare GIL to other stocks including Brighthouse Financial, Inc. (NASDAQ:BHF), Qurate Retail, Inc. (NASDAQ:QRTEA), and Lexington Realty Trust (NYSE:LXP) to get a better sense of its popularity.

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

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

GOTHAM ASSET MANAGEMENT

Joel Greenblatt of Gotham Asset Management

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the recent hedge fund action surrounding Gildan Activewear Inc (NYSE:GIL).

How have hedgies been trading Gildan Activewear Inc (NYSE:GIL)?

At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2019. By comparison, 27 hedge funds held shares or bullish call options in GIL a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Gildan Activewear Inc (NYSE:GIL) was held by Pzena Investment Management, which reported holding $175.4 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $24.6 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Gratia Capital allocated the biggest weight to Gildan Activewear Inc (NYSE:GIL), around 14.45% of its 13F portfolio. Galibier Capital Management is also relatively very bullish on the stock, earmarking 2.9 percent of its 13F equity portfolio to GIL.

Since Gildan Activewear Inc (NYSE:GIL) has faced falling interest from the smart money, we can see that there exists a select few hedge funds that elected to cut their positions entirely in the first quarter. At the top of the heap, Angela Aldrich’s Bayberry Capital Partners dropped the largest position of the 750 funds watched by Insider Monkey, valued at about $18 million in stock, and Martin D. Sass’s MD Sass was right behind this move, as the fund dropped about $15.7 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Gildan Activewear Inc (NYSE:GIL). We will take a look at Brighthouse Financial, Inc. (NASDAQ:BHF), Qurate Retail, Inc. (NASDAQ:QRTEA), Lexington Realty Trust (NYSE:LXP), and Air Lease Corp (NYSE:AL). This group of stocks’ market caps match GIL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BHF 25 372976 -18
QRTEA 32 477820 -7
LXP 10 41143 -4
AL 20 378732 -3
Average 21.75 317668 -8

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $318 million. That figure was $275 million in GIL’s case. Qurate Retail, Inc. (NASDAQ:QRTEA) is the most popular stock in this table. On the other hand Lexington Realty Trust (NYSE:LXP) is the least popular one with only 10 bullish hedge fund positions. Gildan Activewear Inc (NYSE:GIL) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on GIL as the stock returned 30.5% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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