Goodrich Petroleum Corporation (GDP): Hedge Fund Sentiment Unchanged

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Goodrich Petroleum Corporation (NYSE:GDP) based on that data.

Hedge fund interest in Goodrich Petroleum Corporation (NYSE:GDP) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Enlivex Therapeutics Ltd. (NASDAQ:ENLV), Kaixin Auto Holdings (NASDAQ:KXIN), and Surface Oncology, Inc. (NASDAQ:SURF) to gather more data points. Our calculations also showed that GDP 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.

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 51 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.

Kevin Michael Ulrich Anchorage Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 view the fresh hedge fund action regarding Goodrich Petroleum Corporation (NYSE:GDP).

How are hedge funds trading Goodrich Petroleum Corporation (NYSE:GDP)?

At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2019. On the other hand, there were a total of 6 hedge funds with a bullish position in GDP a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is GDP A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Anchorage Advisors, managed by Kevin Michael Ulrich and Anthony Davis, holds the largest position in Goodrich Petroleum Corporation (NYSE:GDP). Anchorage Advisors has a $6.7 million position in the stock, comprising 0.4% of its 13F portfolio. On Anchorage Advisors’s heels is Deep Basin Capital, led by Matt Smith, holding a $2.8 million position; 0.7% of its 13F portfolio is allocated to the company. Some other peers that hold long positions contain Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management and . In terms of the portfolio weights assigned to each position Deep Basin Capital allocated the biggest weight to Goodrich Petroleum Corporation (NYSE:GDP), around 0.7% of its 13F portfolio. Anchorage Advisors is also relatively very bullish on the stock, designating 0.44 percent of its 13F equity portfolio to GDP.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s also examine hedge fund activity in other stocks similar to Goodrich Petroleum Corporation (NYSE:GDP). These stocks are Enlivex Therapeutics Ltd. (NASDAQ:ENLV), Kaixin Auto Holdings (NASDAQ:KXIN), Surface Oncology, Inc. (NASDAQ:SURF), and AquaBounty Technologies, Inc. (NASDAQ:AQB). This group of stocks’ market values are similar to GDP’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ENLV 2 2531 1
KXIN 1 58 -1
SURF 6 5640 0
AQB 2 3222 -1
Average 2.75 2863 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.75 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $11 million in GDP’s case. Surface Oncology, Inc. (NASDAQ:SURF) is the most popular stock in this table. On the other hand Kaixin Auto Holdings (NASDAQ:KXIN) is the least popular one with only 1 bullish hedge fund positions. Goodrich Petroleum Corporation (NYSE:GDP) 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on GDP as the stock returned 88.7% in Q2 (through the end of May) 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.