Green Dot Corporation (GDOT) Investors Seeing Green As Shares Jump 35%: Did Hedge Funds See It Coming?

What does the smart money think about Green Dot Corporation (NYSE:GDOT)?

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -24% from the fourth quarter. In terms of value of holdings, hedge funds tracked by Insider Monkey had a total of $94.23 million in Green Dot Corporation shares in their portfolios by the end of the first quarter, a steep decline of 99.49% from the $187.98 million held at the end of the previous quarter, even considering the fact that the company’s shares declined 20.25% during the period.

Nonetheless, there are still hedge funds bullish on Green Dot Corporation. Joseph A. Jolson’s Harvest Capital Strategies had the biggest position in Green Dot Corporation (NYSE:GDOT), worth close to $35.4 million, amounting to 3.1% of its total 13F portfolio. The second-most bullish hedge fund manager was QVT Financial, managed by Daniel Gold, which held a $14.9 million position; the fund had 0.8% of its 13F portfolio invested in the stock. Some other peers that hold long positions consist of Neil Chriss’ Hutchin Hill Capital, Ken Griffin’s Citadel Investment Group, and Tom Henwood’s OMT Capital Management.

Judging by the fact that Green Dot Corporation (NYSE:GDOT) has experienced bearish sentiment from hedge fund managers, logic holds that there exists a select few fund managers who slashed their entire stakes last quarter. Interestingly, David Einhorn’s Greenlight Capital sold off the biggest stake of all the hedgies tracked by Insider Monkey, valued at about $25.6 million in call options. Joseph A. Jolson’s fund, Harvest Capital Strategies, also cut its call options, about $10.3 million worth, though as mentioned, it maintained a large long position. These bearish behaviors are intriguing to say the least however, as aggregate hedge fund interest dropped by 6 funds last quarter.

Judging from the exodus of hedge funds in the first quarter, it seems hedgies did not see Green Dot Corporation’s jump coming today, while the insider purchase appears to have been the apt indicator here, again proving its importance and signifying why we monitor such activity in stocks. Given the conflicting signals and the already massive jump today, we hold a neutral position on the stock at this time.

Disclosure: None