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 gone over 730 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 June 28th. In this article we look at what those investors think of Goosehead Insurance, Inc. (NASDAQ:GSHD).
Goosehead Insurance, Inc. (NASDAQ:GSHD) was in 7 hedge funds’ portfolios at the end of the second quarter of 2019. GSHD has seen an increase in support from the world’s most elite money managers lately. There were 4 hedge funds in our database with GSHD holdings at the end of the previous quarter. Our calculations also showed that GSHD isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to review the recent hedge fund action regarding Goosehead Insurance, Inc. (NASDAQ:GSHD).
How have hedgies been trading Goosehead Insurance, Inc. (NASDAQ:GSHD)?
Heading into the third quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 75% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in GSHD a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Driehaus Capital was the largest shareholder of Goosehead Insurance, Inc. (NASDAQ:GSHD), with a stake worth $17.3 million reported as of the end of March. Trailing Driehaus Capital was Akre Capital Management, which amassed a stake valued at $4.9 million. D E Shaw, Wildcat Capital Management, and Winton Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, some big names have jumped into Goosehead Insurance, Inc. (NASDAQ:GSHD) headfirst. Wildcat Capital Management, managed by Leonard A. Potter, established the most outsized position in Goosehead Insurance, Inc. (NASDAQ:GSHD). Wildcat Capital Management had $3.3 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.3 million position during the quarter. The other funds with brand new GSHD positions are Cliff Asness’s AQR Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Goosehead Insurance, Inc. (NASDAQ:GSHD). These stocks are Deluxe Corporation (NYSE:DLX), SailPoint Technologies Holdings, Inc. (NYSE:SAIL), Kronos Worldwide, Inc. (NYSE:KRO), and Plexus Corp. (NASDAQ:PLXS). This group of stocks’ market values are similar to GSHD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DLX | 19 | 126428 | -2 |
| SAIL | 22 | 290722 | -5 |
| KRO | 12 | 31123 | -1 |
| PLXS | 8 | 50959 | -1 |
| Average | 15.25 | 124808 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $125 million. That figure was $30 million in GSHD’s case. SailPoint Technologies Holdings, Inc. (NYSE:SAIL) is the most popular stock in this table. On the other hand Plexus Corp. (NASDAQ:PLXS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Goosehead Insurance, Inc. (NASDAQ:GSHD) is even less popular than PLXS. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on GSHD, though not to the same extent, as the stock returned 3.2% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
