Is GBX A Good Stock To Buy Now?

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards The Greenbrier Companies Inc (NYSE:GBX).

Is GBX a good stock to buy now? The Greenbrier Companies Inc (NYSE:GBX) shareholders have witnessed an increase in enthusiasm from smart money lately. The Greenbrier Companies Inc (NYSE:GBX) was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 24. Our calculations also showed that GBX 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.

To the average investor there are several signals shareholders employ to evaluate their stock investments. Some of the best signals are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the broader indices by a healthy margin (see the details here).


Ken Griffin of Citadel Investment Group

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. Keeping this in mind let’s take a gander at the new hedge fund action regarding The Greenbrier Companies Inc (NYSE:GBX).

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

At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 56% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GBX over the last 21 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

More specifically, Millennium Management was the largest shareholder of The Greenbrier Companies Inc (NYSE:GBX), with a stake worth $12.2 million reported as of the end of September. Trailing Millennium Management was Intrinsic Edge Capital, which amassed a stake valued at $8.9 million. Scopus Asset Management, Citadel Investment Group, and Skylands Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Intrinsic Edge Capital allocated the biggest weight to The Greenbrier Companies Inc (NYSE:GBX), around 0.6% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, earmarking 0.53 percent of its 13F equity portfolio to GBX.

Consequently, some big names were leading the bulls’ herd. Intrinsic Edge Capital, managed by Mark Coe, assembled the largest position in The Greenbrier Companies Inc (NYSE:GBX). Intrinsic Edge Capital had $8.9 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $3.4 million position during the quarter. The following funds were also among the new GBX investors: Paul Tudor Jones’s Tudor Investment Corp, Mika Toikka’s AlphaCrest Capital Management, and Donald Sussman’s Paloma Partners.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as The Greenbrier Companies Inc (NYSE:GBX) but similarly valued. These stocks are Oak Street Health, Inc. (NYSE:OSH), Encore Wire Corporation (NASDAQ:WIRE), Corecivic Inc. (NYSE:CXW), National HealthCare Corporation (NYSE:NHC), Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM), At Home Group Inc. (NYSE:HOME), and Schweitzer-Mauduit International, Inc. (NYSE:SWM). This group of stocks’ market values are similar to GBX’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OSH 22 401333 22
WIRE 22 49809 2
CXW 19 54489 4
NHC 10 55809 -1
RYTM 10 227247 -1
HOME 34 370504 7
SWM 11 16466 2
Average 18.3 167951 5

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $168 million. That figure was $39 million in GBX’s case. At Home Group Inc. (NYSE:HOME) is the most popular stock in this table. On the other hand National HealthCare Corporation (NYSE:NHC) is the least popular one with only 10 bullish hedge fund positions. The Greenbrier Companies Inc (NYSE:GBX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GBX is 35.8. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on GBX as the stock returned 20.4% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

Follow Greenbrier Companies Inc (NYSE:GBX)

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