Is GAIA A Good Stock To Buy Now?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Gaia, Inc. (NASDAQ:GAIA).

Is GAIA a good stock to buy now? The smart money was in an optimistic mood. The number of long hedge fund bets improved by 2 in recent months. Gaia, Inc. (NASDAQ:GAIA) was in 15 hedge funds’ portfolios at the end of September. The all time high for this statistic is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GAIA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most stock holders, hedge funds are seen as unimportant, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading at present, We choose to focus on the top tier of this club, about 850 funds. These money managers command the majority of the smart money’s total asset base, and by monitoring their best investments, Insider Monkey has revealed a number of investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Peter Algert of Algert Global

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s take a look at the latest hedge fund action encompassing Gaia, Inc. (NASDAQ:GAIA).

Do Hedge Funds Think GAIA Is A Good Stock To Buy Now?

At third quarter’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GAIA over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Gaia, Inc. (NASDAQ:GAIA) was held by MIC Capital Partners, which reported holding $12.4 million worth of stock at the end of September. It was followed by Royce & Associates with a $4.6 million position. Other investors bullish on the company included Ariel Investments, P.A.W. CAPITAL PARTNERS, and Phoenician Capital. In terms of the portfolio weights assigned to each position MIC Capital Partners allocated the biggest weight to Gaia, Inc. (NASDAQ:GAIA), around 3.65% of its 13F portfolio. P.A.W. CAPITAL PARTNERS is also relatively very bullish on the stock, dishing out 3.21 percent of its 13F equity portfolio to GAIA.

As aggregate interest increased, key hedge funds have jumped into Gaia, Inc. (NASDAQ:GAIA) headfirst. Citadel Investment Group, managed by Ken Griffin, assembled the biggest position in Gaia, Inc. (NASDAQ:GAIA). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter. Peter Algert’s Algert Global also made a $0.1 million investment in the stock during the quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Gaia, Inc. (NASDAQ:GAIA) but similarly valued. These stocks are CorMedix Inc. (NYSE:CRMD), Saratoga Investment Corp (NYSE:SAR), Nymox Pharmaceutical Corporation (NASDAQ:NYMX), PolyPid Ltd. (NASDAQ:PYPD), The Cato Corporation (NYSE:CATO), Trecora Resources (NYSE:TREC), and Southern First Bancshares, Inc. (NASDAQ:SFST). This group of stocks’ market caps match GAIA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CRMD 5 12462 2
SAR 5 5782 -2
NYMX 1 88 -1
PYPD 2 3226 -3
CATO 12 12305 0
TREC 6 15560 -3
SFST 6 10610 0
Average 5.3 8576 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.3 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $32 million in GAIA’s case. The Cato Corporation (NYSE:CATO) is the most popular stock in this table. On the other hand Nymox Pharmaceutical Corporation (NASDAQ:NYMX) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Gaia, Inc. (NASDAQ:GAIA) is more popular among hedge funds. Our overall hedge fund sentiment score for GAIA is 87. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Unfortunately GAIA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GAIA were disappointed as the stock returned 1.9% since the end of the third quarter (through 12/14) 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 most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.