Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Gibraltar Industries Inc (NASDAQ:ROCK).
Gibraltar Industries Inc (NASDAQ:ROCK) was in 23 hedge funds’ portfolios at the end of September. ROCK has experienced an increase in activity from the world’s largest hedge funds lately. There were 21 hedge funds in our database with ROCK positions at the end of the previous 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 The Buckle, Inc. (NYSE:BKE), BNC Bancorp (NASDAQ:BNCN), and Osisko Gold Royalties Ltd (NYSE:OR) to gather more data points.
With all of this in mind, we’re going to check out the key action surrounding Gibraltar Industries Inc (NASDAQ:ROCK).
How have hedgies been trading Gibraltar Industries Inc (NASDAQ:ROCK)?
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in ROCK heading into this year. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, led by Jim Simons, holds the largest position in Gibraltar Industries Inc (NASDAQ:ROCK). Renaissance Technologies has a $36.1 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Pzena Investment Management, led by Richard S. Pzena, holding a $21.1 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism include Cliff Asness’s AQR Capital Management, David Park’s Headlands Capital and Chuck Royce’s Royce & Associates. 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.
Now, key money managers have jumped into Gibraltar Industries Inc (NASDAQ:ROCK) headfirst. Hutchin Hill Capital, led by Neil Chriss, established the most outsized position in Gibraltar Industries Inc (NASDAQ:ROCK). Hutchin Hill Capital had $1.9 million invested in the company at the end of the quarter. Joshua Packwood and Schuster Tanger’s Radix Partners also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew Tewksbury’s Stevens Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Gibraltar Industries Inc (NASDAQ:ROCK). We will take a look at The Buckle, Inc. (NYSE:BKE), BNC Bancorp (NASDAQ:BNCN), Osisko Gold Royalties Ltd (NYSE:OR), and Union First Market Bankshares Corp. (NASDAQ:UBSH). This group of stocks’ market caps resemble ROCK’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $145 million in ROCK’s case. The Buckle, Inc. (NYSE:BKE) is the most popular stock in this table. On the other hand Osisko Gold Royalties Ltd (NYSE:OR) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Gibraltar Industries Inc (NASDAQ:ROCK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.