Is GLPI A Good Stock To Buy According To Hedge Funds?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Gaming and Leisure Properties Inc (NASDAQ:GLPI) in this article.

Is GLPI a good stock to buy? The best stock pickers were selling. The number of long hedge fund positions shrunk by 5 recently. Gaming and Leisure Properties Inc (NASDAQ:GLPI) was in 30 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 59. Our calculations also showed that GLPI 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 21st century investor’s toolkit there are a large number of formulas market participants use to value stocks. A couple of the less known formulas are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the top money managers can outclass their index-focused peers by a healthy margin (see the details here).

Brian Gustavson of 1060 Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. With all of this in mind we’re going to take a look at the new hedge fund action encompassing Gaming and Leisure Properties Inc (NASDAQ:GLPI).

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

At third quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GLPI over the last 21 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in Gaming and Leisure Properties Inc (NASDAQ:GLPI), which was worth $119.8 million at the end of the third quarter. On the second spot was Gates Capital Management which amassed $116.5 million worth of shares. Long Pond Capital, Citadel Investment Group, and Cardinal 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 Gates Capital Management allocated the biggest weight to Gaming and Leisure Properties Inc (NASDAQ:GLPI), around 5.08% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, setting aside 4.82 percent of its 13F equity portfolio to GLPI.

Judging by the fact that Gaming and Leisure Properties Inc (NASDAQ:GLPI) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few funds that slashed their positions entirely last quarter. It’s worth mentioning that Isaac Corre’s Governors Lane dropped the largest stake of the “upper crust” of funds watched by Insider Monkey, worth close to $7.2 million in stock, and Richard Driehaus’s Driehaus Capital was right behind this move, as the fund cut about $1.5 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 5 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Gaming and Leisure Properties Inc (NASDAQ:GLPI). These stocks are Holdings, Inc. (NYSE:BILL), BorgWarner Inc. (NYSE:BWA), Snap-on Incorporated (NYSE:SNA), Dropbox, Inc. (NASDAQ:DBX), Melco Resorts & Entertainment Limited (NASDAQ:MLCO), Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), and Everest Re Group Ltd (NYSE:RE). This group of stocks’ market valuations resemble GLPI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BILL 44 1554533 -8
BWA 30 797912 -5
SNA 24 407096 4
DBX 43 992075 -8
MLCO 34 823821 2
JAZZ 28 1259384 -6
RE 36 526484 7
Average 34.1 908758 -2

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.1 hedge funds with bullish positions and the average amount invested in these stocks was $909 million. That figure was $634 million in GLPI’s case. Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Snap-on Incorporated (NYSE:SNA) is the least popular one with only 24 bullish hedge fund positions. Gaming and Leisure Properties Inc (NASDAQ:GLPI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GLPI is 30.3. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on GLPI as the stock returned 15.3% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.

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