Is GATX Corporation (GMT) A Good Stock To Buy?

Since GATX Corporation (NYSE:GMT) has witnessed declining sentiment from the smart money, logic holds that there is a sect of funds that decided to sell off their full holdings by the end of the third quarter. Interestingly, Chuck Royce’s Royce & Associates said goodbye to the largest position of the 700 funds tracked by Insider Monkey, comprising close to $1.7 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also said goodbye to its stock, about $0.8 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to GATX Corporation (NYSE:GMT). We will take a look at Balchem Corporation (NASDAQ:BCPC), AllianceBernstein Income Fund Inc. (NYSE:ACG), Alexander’s, Inc. (NYSE:ALX), and SUPERVALU INC. (NYSE:SVU). This group of stocks’ market values are closest to GMT’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BCPC 6 77455 -1
ACG 6 39613 1
ALX 5 80095 -1
SVU 40 396972 2

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $149 million. That figure was $188 million in GMT’s case. SUPERVALU INC. (NYSE:SVU) is the most popular stock in this table. On the other hand Alexander’s, Inc. (NYSE:ALX) is the least popular one with only 5 bullish hedge fund positions. GATX Corporation (NYSE:GMT) is not the least popular stock in this group, but hedge fund interest is average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SVU might be a better candidate to consider a long position.