Before we spend countless hours researching a company, we’d like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Chart Industries, Inc. (NASDAQ:GTLS).
Is Chart Industries, Inc. (NASDAQ:GTLS) going to take off soon? Money managers are getting more optimistic. The number of bullish hedge fund bets improved by 5 in recent months. Our calculations also showed that GTLS isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s take a peek at the latest hedge fund action surrounding Chart Industries, Inc. (NASDAQ:GTLS).
Hedge fund activity in Chart Industries, Inc. (NASDAQ:GTLS)
At the end of the first quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in GTLS a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Chart Industries, Inc. (NASDAQ:GTLS). Citadel Investment Group has a $55.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Fisher Asset Management, led by Ken Fisher, holding a $48.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions include Principal Global Investors’s Columbus Circle Investors, Anand Parekh’s Alyeska Investment Group and Mario Gabelli’s GAMCO Investors.
Consequently, key hedge funds were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, created the largest position in Chart Industries, Inc. (NASDAQ:GTLS). Point72 Asset Management had $7.3 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $5.2 million position during the quarter. The other funds with brand new GTLS positions are Vince Maddi and Shawn Brennan’s SIR Capital Management, Mariko Gordon’s Daruma Asset Management, and Richard Driehaus’s Driehaus Capital.
Let’s go over hedge fund activity in other stocks similar to Chart Industries, Inc. (NASDAQ:GTLS). We will take a look at Genesis Energy, L.P. (NYSE:GEL), Valmont Industries, Inc. (NYSE:VMI), Holly Energy Partners, L.P. (NYSE:HEP), and Canada Goose Holdings Inc. (NYSE:GOOS). This group of stocks’ market caps are similar to GTLS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $267 million in GTLS’s case. Canada Goose Holdings Inc. (NYSE:GOOS) is the most popular stock in this table. On the other hand Genesis Energy, L.P. (NYSE:GEL) is the least popular one with only 3 bullish hedge fund positions. Chart Industries, Inc. (NASDAQ:GTLS) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately GTLS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GTLS were disappointed as the stock returned -13.8% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.