We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Gaming and Leisure Properties Inc (NASDAQ:GLPI).
Gaming and Leisure Properties Inc (NASDAQ:GLPI) investors should be aware of an increase in hedge fund interest recently. Our calculations also showed that glpi isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a glance at the new hedge fund action surrounding Gaming and Leisure Properties Inc (NASDAQ:GLPI).
Hedge fund activity in Gaming and Leisure Properties Inc (NASDAQ:GLPI)
At Q3’s end, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from one quarter earlier. By comparison, 25 hedge funds held shares or bullish call options in GLPI heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Gaming and Leisure Properties Inc (NASDAQ:GLPI), which was worth $355.4 million at the end of the third quarter. On the second spot was PAR Capital Management which amassed $174.5 million worth of shares. Moreover, Gates Capital Management, Citadel Investment Group, and Millennium Management were also bullish on Gaming and Leisure Properties Inc (NASDAQ:GLPI), allocating a large percentage of their portfolios to this stock.
Consequently, key hedge funds were leading the bulls’ herd. Waterfront Capital Partners, managed by Eduardo Abush, assembled the largest position in Gaming and Leisure Properties Inc (NASDAQ:GLPI). Waterfront Capital Partners had $31.2 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $30.2 million investment in the stock during the quarter. The other funds with brand new GLPI positions are Malcolm Fairbairn’s Ascend Capital, Steve Cohen’s Point72 Asset Management, and Bruce Kovner’s Caxton Associates LP.
Let’s now take a look at hedge fund activity in other stocks similar to Gaming and Leisure Properties Inc (NASDAQ:GLPI). These stocks are Zendesk Inc (NYSE:ZEN), Donaldson Company, Inc. (NYSE:DCI), Telecom Argentina S.A. (NYSE:TEO), and Helmerich & Payne, Inc. (NYSE:HP). All of these stocks’ market caps are closest to GLPI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZEN | 44 | 1792157 | 3 |
| DCI | 17 | 175975 | 5 |
| TEO | 9 | 55173 | -5 |
| HP | 33 | 369830 | 7 |
| Average | 25.75 | 598284 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $598 million. That figure was $1.48 billion in GLPI’s case. Zendesk Inc (NYSE:ZEN) is the most popular stock in this table. On the other hand Telecom Argentina S.A. (NYSE:TEO) is the least popular one with only 9 bullish hedge fund positions. Gaming and Leisure Properties Inc (NASDAQ:GLPI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ZEN might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
