The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Gaia, Inc. (NASDAQ:GAIA) and determine whether the smart money was really smart about this stock.
Gaia, Inc. (NASDAQ:GAIA) investors should be aware of an increase in hedge fund sentiment in recent months. Our calculations also showed that GAIA 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.
In the 21st century investor’s toolkit there are tons of indicators investors employ to evaluate their stock investments. A duo of the less known indicators are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top investment managers can trounce the S&P 500 by a significant margin (see the details here).
John Rogers of Ariel Investments
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to analyze the recent hedge fund action surrounding Gaia, Inc. (NASDAQ:GAIA).
How have hedgies been trading Gaia, Inc. (NASDAQ:GAIA)?
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in GAIA a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, MIC Capital Partners held the most valuable stake in Gaia, Inc. (NASDAQ:GAIA), which was worth $11.2 million at the end of the third quarter. On the second spot was Ariel Investments which amassed $8.1 million worth of shares. Royce & Associates, P.A.W. CAPITAL PARTNERS, and Phoenician Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position MIC Capital Partners allocated the biggest weight to Gaia, Inc. (NASDAQ:GAIA), around 5.46% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, dishing out 3.29 percent of its 13F equity portfolio to GAIA.
As aggregate interest increased, specific money managers have jumped into Gaia, Inc. (NASDAQ:GAIA) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the largest position in Gaia, Inc. (NASDAQ:GAIA). Marshall Wace LLP had $0.3 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also made a $0.1 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to Gaia, Inc. (NASDAQ:GAIA). We will take a look at Nymox Pharmaceutical Corporation (NASDAQ:NYMX), Misonix, Inc. (NASDAQ:MSON), Aspen Aerogels Inc (NYSE:ASPN), and MediciNova, Inc. (NASDAQ:MNOV). This group of stocks’ market values are closest to GAIA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NYMX | 5 | 1340 | 0 |
| MSON | 9 | 18009 | 5 |
| ASPN | 10 | 17366 | 3 |
| MNOV | 6 | 1474 | -1 |
| Average | 7.5 | 9547 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $30 million in GAIA’s case. Aspen Aerogels Inc (NYSE:ASPN) is the most popular stock in this table. On the other hand Nymox Pharmaceutical Corporation (NASDAQ:NYMX) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Gaia, Inc. (NASDAQ:GAIA) is more popular among hedge funds. 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 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. Unfortunately GAIA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on GAIA were disappointed as the stock returned -5.6% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
