Here is What Hedge Funds Think About Graco Inc. (GGG)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Graco Inc. (NYSE:GGG).

Graco Inc. (NYSE:GGG) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 25 hedge funds’ portfolios at the end of March. Our calculations also showed that GGG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Atmos Energy Corporation (NYSE:ATO), Chegg Inc (NYSE:CHGG), and Annaly Capital Management, Inc. (NYSE:NLY) to gather more data points.

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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. With all of this in mind let’s take a gander at the recent hedge fund action encompassing Graco Inc. (NYSE:GGG).

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

Heading into the second quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards GGG over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, GAMCO Investors held the most valuable stake in Graco Inc. (NYSE:GGG), which was worth $87.1 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $49.7 million worth of shares. Millennium Management, Renaissance Technologies, and Arrowstreet 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 GAMCO Investors allocated the biggest weight to Graco Inc. (NYSE:GGG), around 0.76% of its 13F portfolio. CQS Cayman LP is also relatively very bullish on the stock, dishing out 0.52 percent of its 13F equity portfolio to GGG.

Seeing as Graco Inc. (NYSE:GGG) has faced falling interest from hedge fund managers, it’s easy to see that there were a few funds that decided to sell off their positions entirely heading into Q2. Interestingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC sold off the biggest position of the 750 funds tracked by Insider Monkey, comprising close to $3.1 million in stock. Ray Dalio’s fund, Bridgewater Associates, also dropped its stock, about $1.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Graco Inc. (NYSE:GGG) but similarly valued. These stocks are Atmos Energy Corporation (NYSE:ATO), Chegg Inc (NYSE:CHGG), Annaly Capital Management, Inc. (NYSE:NLY), Advance Auto Parts, Inc. (NYSE:AAP), AMERCO (NASDAQ:UHAL), Darling Ingredients Inc. (NYSE:DAR), and Cree, Inc. (NASDAQ:CREE). This group of stocks’ market values are similar to GGG’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.4 hedge funds with bullish positions and the average amount invested in these stocks was $613 million. That figure was $327 million in GGG’s case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand Atmos Energy Corporation (NYSE:ATO) is the least popular one with only 15 bullish hedge fund positions. Graco Inc. (NYSE:GGG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GGG is 46.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 July 9th and surpassed the market again by 6.7 percentage points. Unfortunately GGG wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GGG investors were disappointed as the stock returned 8.7% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.