We can judge whether Greenbrier Companies Inc (NYSE:GBX) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Is Greenbrier Companies Inc (NYSE:GBX) the right investment to pursue these days? Hedge funds are selling. The number of long hedge fund bets were cut by 5 in recent months. GBX was in 17 hedge funds’ portfolios at the end of the third quarter of 2015. There were 22 hedge funds in our database with GBX positions at the end of the previous quarter. At the end of this article we will also compare GBX to other stocks including Alamos Gold Inc (NYSE:AGI), Trueblue Inc (NYSE:TBI), and Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) to get a better sense of its popularity.
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To most stock holders, hedge funds are assumed to be worthless, old investment tools of yesteryear. While there are more than 8000 funds trading at present, Our researchers hone in on the top tier of this club, about 700 funds. These money managers command most of the smart money’s total capital, and by following their matchless stock picks, Insider Monkey has found a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, we’re going to take a gander at the recent action surrounding Greenbrier Companies Inc (NYSE:GBX).
What have hedge funds been doing with Greenbrier Companies Inc (NYSE:GBX)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -23% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Coatue Management, managed by Philippe Laffont, holds the biggest position in Greenbrier Companies Inc (NYSE:GBX). Coatue Management has a $32.1 million position in the stock, comprising 0.4% of its 13F portfolio. On Coatue Management’s heels is PAR Capital Management, managed by Paul Reeder and Edward Shapiro, which holds a $27.8 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions encompass Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Mario Gabelli’s GAMCO Investors.
Because Greenbrier Companies Inc (NYSE:GBX) has experienced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of money managers who were dropping their positions entirely in the third quarter. Interestingly, Brian Taylor’s Pine River Capital Management dropped the largest position of all the hedgies followed by Insider Monkey, valued at close to $12.8 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund dropped about $4.4 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 5 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Greenbrier Companies Inc (NYSE:GBX). These stocks are Alamos Gold Inc (NYSE:AGI), Trueblue Inc (NYSE:TBI), Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), and Dynavax Technologies Corporation (NASDAQ:DVAX). This group of stocks’ market values are similar to GBX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGI | 13 | 54874 | 3 |
| TBI | 14 | 53106 | 0 |
| ACHN | 24 | 269553 | -1 |
| DVAX | 32 | 348181 | 5 |
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $181 million, versus $127 million in GBX’s case. Dynavax Technologies Corporation (NASDAQ:DVAX) is the most popular stock in this table with 32 hedge funds reporting stakes. On the other hand Alamos Gold Inc (NYSE:AGI) is the least popular one with only 13 bullish hedge fund positions. Greenbrier Companies Inc (NYSE:GBX) 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 DVAX might be a better candidate to consider a long position.
