Before we spend countless hours researching a company, we 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 Greenhill & Co., Inc. (NYSE:GHL).
Greenhill & Co., Inc. (NYSE:GHL) was in 15 hedge funds’ portfolios at the end of March. GHL investors should be aware of an increase in enthusiasm from smart money in recent months. There were 13 hedge funds in our database with GHL positions at the end of the previous quarter. Our calculations also showed that GHL isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a gander at the fresh hedge fund action encompassing Greenhill & Co., Inc. (NYSE:GHL).
What does smart money think about Greenhill & Co., Inc. (NYSE:GHL)?
Heading into the second quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GHL over the last 15 quarters. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Greenhill & Co., Inc. (NYSE:GHL), with a stake worth $15.8 million reported as of the end of March. Trailing Fisher Asset Management was Citadel Investment Group, which amassed a stake valued at $7.2 million. Ancora Advisors, Renaissance Technologies, and Balyasny Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the biggest position in Greenhill & Co., Inc. (NYSE:GHL). Balyasny Asset Management had $2.3 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Greenhill & Co., Inc. (NYSE:GHL) but similarly valued. We will take a look at Priority Technology Holdings, Inc. (NASDAQ:PRTH), Cytokinetics, Inc. (NASDAQ:CYTK), The York Water Company (NASDAQ:YORW), and Green Brick Partners Inc (NASDAQ:GRBK). All of these stocks’ market caps are similar to GHL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRTH | 2 | 4360 | -1 |
| CYTK | 16 | 69419 | 0 |
| YORW | 5 | 17100 | 0 |
| GRBK | 10 | 276439 | -4 |
| Average | 8.25 | 91830 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $40 million in GHL’s case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Priority Technology Holdings, Inc. (NASDAQ:PRTH) is the least popular one with only 2 bullish hedge fund positions. Greenhill & Co., Inc. (NYSE:GHL) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GHL wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GHL were disappointed as the stock returned -34.6% 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.
