Is GlaxoSmithKline plc (GSK) Going to Burn These Hedge Funds?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards GlaxoSmithKline plc (NYSE:GSK) changed recently.

GlaxoSmithKline plc (NYSE:GSK) has experienced an increase in support from the world’s most elite money managers recently. GlaxoSmithKline plc (NYSE:GSK) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. Our calculations also showed that GSK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to view the latest hedge fund action regarding GlaxoSmithKline plc (NYSE:GSK).

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

At third quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the second quarter of 2021. On the other hand, there were a total of 31 hedge funds with a bullish position in GSK a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Is GSK A Good Stock To Buy?

The largest stake in GlaxoSmithKline plc (NYSE:GSK) was held by Fisher Asset Management, which reported holding $681.3 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $359.7 million position. Other investors bullish on the company included Arrowstreet Capital, Two Sigma Advisors, and Camber Capital Management. In terms of the portfolio weights assigned to each position Healthcare Value Capital allocated the biggest weight to GlaxoSmithKline plc (NYSE:GSK), around 7.54% of its 13F portfolio. Kahn Brothers is also relatively very bullish on the stock, dishing out 7.28 percent of its 13F equity portfolio to GSK.

As one would reasonably expect, key money managers have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in GlaxoSmithKline plc (NYSE:GSK). Balyasny Asset Management had $19.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $13.4 million position during the quarter. The other funds with new positions in the stock are Matthew Mark’s Jet Capital Investors, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as GlaxoSmithKline plc (NYSE:GSK) but similarly valued. We will take a look at Lockheed Martin Corporation (NYSE:LMT), Infosys Limited (NYSE:INFY), Prologis Inc (NYSE:PLD), Zoetis Inc (NYSE:ZTS), BP plc (NYSE:BP), Snowflake Inc (NYSE:SNOW), and Anthem Inc (NYSE:ANTM). This group of stocks’ market values match GSK’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LMT 51 1284495 -7
INFY 29 2473668 7
PLD 32 483464 -8
ZTS 58 2713394 0
BP 29 1053236 -1
SNOW 73 14569929 3
ANTM 59 4585560 -8
Average 47.3 3880535 -2

View table here if you experience formatting issues.

As you can see these stocks had an average of 47.3 hedge funds with bullish positions and the average amount invested in these stocks was $3881 million. That figure was $1659 million in GSK’s case. Snowflake Inc (NYSE:SNOW) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 29 bullish hedge fund positions. GlaxoSmithKline plc (NYSE:GSK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GSK is 36.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on GSK as the stock returned 9% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.

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