Hedge Funds Are Piling Into Gogo Inc (GOGO)

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Gogo Inc (NASDAQ:GOGO)? The smart money sentiment can provide an answer to this question.

Is Gogo Inc (NASDAQ:GOGO) a buy right now? Prominent investors were taking an optimistic view. The number of long hedge fund positions rose by 4 in recent months. Gogo Inc (NASDAQ:GOGO) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GOGO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At the moment there are numerous methods market participants employ to analyze their holdings. Some of the most innovative methods are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top money managers can beat the S&P 500 by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a gander at the recent hedge fund action encompassing Gogo Inc (NASDAQ:GOGO).

Do Hedge Funds Think GOGO Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 22% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GOGO over the last 24 quarters. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Tenzing Global Investors, managed by Chet Kapoor, holds the largest position in Gogo Inc (NASDAQ:GOGO). Tenzing Global Investors has a $48.4 million position in the stock, comprising 12.8% of its 13F portfolio. The second most bullish fund manager is D. E. Shaw of D E Shaw, with a $47.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Israel Englander’s Millennium Management, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Tenzing Global Investors allocated the biggest weight to Gogo Inc (NASDAQ:GOGO), around 12.78% of its 13F portfolio. Algert Global is also relatively very bullish on the stock, dishing out 0.38 percent of its 13F equity portfolio to GOGO.

As one would reasonably expect, key money managers were leading the bulls’ herd. ExodusPoint Capital, managed by Michael Gelband, initiated the largest position in Gogo Inc (NASDAQ:GOGO). ExodusPoint Capital had $1.9 million invested in the company at the end of the quarter. Peter Algert’s Algert Global also initiated a $1.1 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Donald Sussman’s Paloma Partners, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s go over hedge fund activity in other stocks similar to Gogo Inc (NASDAQ:GOGO). These stocks are Southside Bancshares, Inc. (NASDAQ:SBSI), Hawaiian Holdings, Inc. (NASDAQ:HA), Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), OrthoPediatrics Corp. (NASDAQ:KIDS), Impinj, Inc. (NASDAQ:PI), and Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX). This group of stocks’ market caps are closest to GOGO’s market cap.

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As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $185 million. That figure was $180 million in GOGO’s case. Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) is the most popular stock in this table. On the other hand Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) is the least popular one with only 4 bullish hedge fund positions. Gogo Inc (NASDAQ:GOGO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GOGO is 78.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on GOGO as the stock returned 50.3% since the end of Q2 (through 10/22) 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.

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