Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Global Payments Inc (NYSE:GPN).
Is Global Payments Inc (NYSE:GPN) a sound investment right now? The best stock pickers are turning bullish. The number of bullish hedge fund bets moved up by 4 in recent months. At the end of this article we will also compare GPN to other stocks including Sabre Corp (NASDAQ:SABR), News Corp (NASDAQ:NWS), and Leucadia National Corp. (NYSE:LUK) to get a better sense of its popularity.
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According to most market participants, hedge funds are seen as unimportant, outdated investment tools of the past. While there are greater than 8000 funds with their doors open at the moment, Our researchers hone in on the moguls of this club, about 700 funds. These hedge fund managers orchestrate bulk of all hedge funds’ total asset base, and by observing their first-class stock picks, Insider Monkey has unearthed a number of investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s take a look at the recent action surrounding Global Payments Inc (NYSE:GPN).
Hedge fund activity in Global Payments Inc (NYSE:GPN)
Heading into Q4, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Samlyn Capital, managed by Robert Pohly, holds the number one position in Global Payments Inc (NYSE:GPN). Samlyn Capital has a $174.3 million position in the stock, comprising 3.2% of its 13F portfolio. The second largest stake is held by Columbus Circle Investors, managed by Clifford Fox, which holds a $92.6 million position; 0.8% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish contain Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, Ben Gambill’s Tiger Eye Capital and D. E. Shaw’s D E Shaw.
Consequently, key money managers have jumped into Global Payments Inc (NYSE:GPN) headfirst. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, assembled the most valuable position in Global Payments Inc (NYSE:GPN). LMR Partners had $8.8 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $2.1 million position during the quarter. The other funds with brand new GPN positions are Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Simon Sadler’s Segantii Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Global Payments Inc (NYSE:GPN) but similarly valued. These stocks are Sabre Corp (NASDAQ:SABR), News Corp (NASDAQ:NWS), Leucadia National Corp. (NYSE:LUK), and Barrick Gold Corporation (USA) (NYSE:ABX). This group of stocks’ market valuations are similar to GPN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SABR | 34 | 848653 | -1 |
| NWS | 15 | 402772 | -5 |
| LUK | 27 | 748075 | -3 |
| ABX | 40 | 937591 | -2 |
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $734 million, compared to $550 million in GPN’s case. Barrick Gold Corporation (USA) (NYSE:ABX) is the most popular stock in this table with 40 funds holding its shares. On the other hand News Corp (NASDAQ:NWS) is the least popular one with only 15 bullish hedge fund positions. Global Payments Inc (NYSE:GPN) 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. In this regard ABX might be a better candidate to consider a long position.
