Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
GameStop Corp. (NYSE:GME) was in 31 hedge funds’ portfolios at the end of September. GameStop Corp. (NYSE:GME) investors should pay attention to an increase in support from the world’s most elite money managers lately. There were 26 hedge funds in our database with GameStop Corp. (NYSE:GME) positions at the end of the previous quarter. At the end of this article, we will also compare GameStop Corp. (NYSE:GME) to other stocks including Jabil Circuit, Inc. (NYSE:JBL), Six Flags Entertainment Corp (NYSE:SIX), and Home Properties, Inc. (NYSE:HME) to get a better sense of its popularity.
If you’d ask most traders, hedge funds are perceived as worthless, old investment vehicles of yesteryear. While there are more than 8,000 funds in operation today, our experts look at the bigwigs of this group, approximately 700 funds. It is estimated that this group of investors direct the majority of the hedge fund industry’s total capital, and by watching their matchless stock picks, Insider Monkey has formulated a few investment strategies that have historically outstripped the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in its backtests.
With all of this in mind, we’re going to take a peek at the latest action surrounding GameStop Corp. (NYSE:GME).
How have hedgies been trading GameStop Corp. (NYSE:GME)?
At the end of Q3, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 19% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available holdings data compiled by Insider Monkey, Ross Margolies’ Stelliam Investment Management has the largest position in GameStop Corp. (NYSE:GME), worth close to $115.5 million, amounting to 2.9% of its total 13F portfolio. The second-largest stake is held by Chase Coleman of Tiger Global Management LLC, with a $72.1 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions encompass Chuck Royce’s mutual fund, Royce & Associates, Cliff Asness’ AQR Capital Management, and David Harding’s Winton Capital Management.
As aggregate interest increased, specific money managers have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the most outsized position in GameStop Corp. (NYSE:GME). Balyasny Asset Management had $8.2 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $5.9 million position during the quarter. The following funds were also among the new GameStop investors: Jacob Gottlieb’s Visium Asset Management, George Hall’s Clinton Group, and Matthew Tewksbury’s Stevens Capital Management.
Let’s now review hedge fund activity in other stocks similar to GameStop Corp. (NYSE:GME). We will take a look at Jabil Circuit, Inc. (NYSE:JBL), Six Flags Entertainment Corp (NYSE:SIX), Home Properties, Inc. (NYSE:HME), and Hexcel Corporation (NYSE:HXL). This group of stocks’ market values are similar to GameStop Corp. (NYSE:GME)’s market value.
|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 27 hedge funds with bullish positions and the average amount invested in these stocks was $504 million. That figure was $483 million in GameStop Corp. (NYSE:GME)’s case. Jabil Circuit, Inc. (NYSE:JBL) is the most popular stock in this table. On the other hand, Hexcel Corporation (NYSE:HXL) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks GameStop Corp. (NYSE:GME) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and interest is growing, it may be a good idea to analyze it in detail and potentially include it in your portfolio.