Here is What Hedge Funds Think About Green Dot Corporation (GDOT)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Green Dot Corporation (NYSE:GDOT) .

Is Green Dot Corporation (NYSE:GDOT) the right investment to pursue these days? Money managers are actually taking a pessimistic view. The number of long hedge fund bets that are revealed through the 13F filings went down by two to 17 during the third quarter. 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 Amplify Snack Brands Inc (NYSE:BETR), Innospec Inc. (NASDAQ:IOSP), and NuStar GP Holdings, LLC (NYSE:NSH) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Now, we’re going to go over the new action regarding Green Dot Corporation (NYSE:GDOT).

What does the smart money think about Green Dot Corporation (NYSE:GDOT)?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long Green Dot Corporation (NYSE:GDOT), down by 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GDOT over the last five quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Joseph A. Jolson’s Harvest Capital Strategies has the largest position in Green Dot Corporation (NYSE:GDOT), worth close to $102 million, amounting to 14.8% of its total 13F portfolio. The second largest stake is held by Park West Asset Management, led by Peter S. Park, holding a $22.5 million position; the fund has 2% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions contain Jim Simons’ Renaissance Technologies, Brian C. Freckmann’s Lyon Street Capital and Malcolm Fairbairn’s Ascend Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually said goodbye to their positions entirely. It’s worth mentioning that John Fichthorn’s Dialectic Capital Management said goodbye to the biggest position of all the hedgies tracked by Insider Monkey, worth about $2.1 million in call options.. Matthew Hulsizer’s fund, PEAK6 Capital Management, also sold off its call options, about $0.5 million worth.

Let’s now take a look at hedge fund activity in other stocks similar to Green Dot Corporation (NYSE:GDOT). We will take a look at Amplify Snack Brands Inc (NYSE:BETR), Innospec Inc. (NASDAQ:IOSP), NuStar GP Holdings, LLC (NYSE:NSH), and Nuveen Credit Strategies Income Fund (NYSE:JQC). This group of stocks’ market caps match GDOT’s market cap.

As you can see these stocks had an average of nine funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $180 million in GDOT’s case. Innospec Inc. (NASDAQ:IOSP) is the most popular stock in this table. On the other hand NuStar GP Holdings, LLC (NYSE:NSH) is the least popular one with only four investors having reported positions. Green Dot Corporation (NYSE:GDOT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Innospec Inc. (NASDAQ:IOSP) might be a better candidate to consider taking a long position in.