Is GIL A Good Stock To Buy Now?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Gildan Activewear Inc (NYSE:GIL) based on those filings.

Is GIL a good stock to buy now? Gildan Activewear Inc (NYSE:GIL) investors should pay attention to a decrease in enthusiasm from smart money in recent months. Gildan Activewear Inc (NYSE:GIL) was in 18 hedge funds’ portfolios at the end of September. The all time high for this statistic is 27. There were 22 hedge funds in our database with GIL positions at the end of the second quarter. Our calculations also showed that GIL 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.

In the eyes of most market participants, hedge funds are seen as underperforming, old financial tools of years past. While there are greater than 8000 funds in operation at the moment, We choose to focus on the crème de la crème of this club, approximately 850 funds. These investment experts have their hands on the lion’s share of the smart money’s total capital, and by paying attention to their inimitable picks, Insider Monkey has found a number of investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum 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 .

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 analyze the new hedge fund action regarding Gildan Activewear Inc (NYSE:GIL).

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

At the end of September, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in GIL a year ago. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Is GIL A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Richard S. Pzena’s Pzena Investment Management has the largest position in Gildan Activewear Inc (NYSE:GIL), worth close to $330.2 million, amounting to 2.1% of its total 13F portfolio. Coming in second is Christopher Shackelton and Adam Gray of Coliseum Capital, with a $70.4 million position; 7.5% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Joseph Sirdevan’s Galibier Capital Management and Prem Watsa’s Fairfax Financial Holdings. In terms of the portfolio weights assigned to each position Gratia Capital allocated the biggest weight to Gildan Activewear Inc (NYSE:GIL), around 7.83% of its 13F portfolio. Coliseum Capital is also relatively very bullish on the stock, earmarking 7.53 percent of its 13F equity portfolio to GIL.

Judging by the fact that Gildan Activewear Inc (NYSE:GIL) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there were a few money managers who sold off their full holdings heading into Q4. Interestingly, Renaissance Technologies dropped the largest stake of all the hedgies monitored by Insider Monkey, comprising an estimated $5.1 million in stock, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors was right behind this move, as the fund dumped about $0.7 million worth. These moves are interesting, as total hedge fund interest fell by 4 funds heading into Q4.

Let’s go over hedge fund activity in other stocks similar to Gildan Activewear Inc (NYSE:GIL). These stocks are CAE, Inc. (NYSE:CAE), Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN), FTI Consulting, Inc. (NYSE:FCN), Curtiss-Wright Corp. (NYSE:CW), QTS Realty Trust Inc (NYSE:QTS), Shift4 Payments, Inc. (NYSE:FOUR), and Parsley Energy Inc (NYSE:PE). This group of stocks’ market values match GIL’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CAE 12 88171 -2
BHVN 33 751815 -9
FCN 37 388149 5
CW 26 229569 0
QTS 25 454581 -4
FOUR 32 243072 17
PE 37 280826 -2
Average 28.9 348026 0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.9 hedge funds with bullish positions and the average amount invested in these stocks was $348 million. That figure was $522 million in GIL’s case. FTI Consulting, Inc. (NYSE:FCN) is the most popular stock in this table. On the other hand CAE, Inc. (NYSE:CAE) is the least popular one with only 12 bullish hedge fund positions. Gildan Activewear Inc (NYSE:GIL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GIL is 33. 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. A small number of hedge funds were also right about betting on GIL as the stock returned 37.4% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.

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