The financial regulations require hedge funds and wealthy investors that crossed the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 28th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Gamco Investors Inc. (NYSE:GBL) based on those filings.
Gamco Investors Inc. (NYSE:GBL) investors should pay attention to an increase in enthusiasm from smart money of late. Our calculations also showed that GBL 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.
Michael Price of MFP Investors
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 take a look at the latest hedge fund action regarding Gamco Investors Inc. (NYSE:GBL).
Hedge fund activity in Gamco Investors Inc. (NYSE:GBL)
Heading into the third quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in GBL over the last 16 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Royce & Associates held the most valuable stake in Gamco Investors Inc. (NYSE:GBL), which was worth $3.2 million at the end of the second quarter. On the second spot was Horizon Asset Management which amassed $2.9 million worth of shares. Moreover, Renaissance Technologies, MFP Investors, and Marshall Wace LLP were also bullish on Gamco Investors Inc. (NYSE:GBL), allocating a large percentage of their portfolios to this stock.
Now, key hedge funds were leading the bulls’ herd. Zebra Capital Management, managed by Roger Ibbotson, initiated the biggest position in Gamco Investors Inc. (NYSE:GBL). Zebra Capital Management had $0.5 million invested in the company at the end of the quarter.
Let’s go over hedge fund activity in other stocks similar to Gamco Investors Inc. (NYSE:GBL). These stocks are Puxin Limited (NYSE:NEW), Mercantile Bank Corporation (NASDAQ:MBWM), B. Riley Financial, Inc. (NASDAQ:RILY), and Zix Corporation (NASDAQ:ZIXI). All of these stocks’ market caps are similar to GBL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NEW | 3 | 4686 | 1 |
| MBWM | 7 | 28326 | 0 |
| RILY | 10 | 106495 | 0 |
| ZIXI | 14 | 74900 | -7 |
| Average | 8.5 | 53602 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $10 million in GBL’s case. Zix Corporation (NASDAQ:ZIXI) is the most popular stock in this table. On the other hand Puxin Limited (NYSE:NEW) is the least popular one with only 3 bullish hedge fund positions. Gamco Investors Inc. (NYSE:GBL) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on GBL, though not to the same extent, as the stock returned 2.1% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
