We can judge whether Godaddy Inc (NYSE:GDDY) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Godaddy Inc (NYSE:GDDY) was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. GDDY investors should pay attention to an increase in hedge fund interest recently. There were 19 hedge funds in our database with GDDY positions at the end of the previous quarter. At the end of this article we will also compare GDDY to other stocks, including Siliconware Precision Industries (ADR) (NASDAQ:SPIL), Team Health Holdings LLC (NYSE:TMH), and Euronet Worldwide, Inc. (NASDAQ:EEFT) to get a better sense of its popularity.
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If you’d ask most investors, hedge funds are seen as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation today, Our researchers hone in on the leaders of this group, around 700 funds. It is estimated that this group of investors administer bulk of the smart money’s total capital, and by keeping an eye on their first-class investments, Insider Monkey has figured out several investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Now, we’re going to take a gander at the fresh action regarding Godaddy Inc (NYSE:GDDY).
How have hedgies been trading Godaddy Inc (NYSE:GDDY)?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 11% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Malcolm Fairbairn’s Ascend Capital has the most valuable position in Godaddy Inc (NYSE:GDDY), worth close to $29 million, amounting to 1.1% of its total 13F portfolio. On Ascend Capital’s heels is Discovery Capital Management, led by Rob Citrone, holding a $17.5 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Dmitry Balyasny’s Balyasny Asset Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Clint Carlson’s Carlson Capital.
Now, key money managers have been driving this bullishness. According to our database, Adage Capital Management assembled the most outsized position in Godaddy Inc (NYSE:GDDY), worth some $15.8 million at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1.7 million position during the quarter. The other funds with brand new GDDY positions are Richard Driehaus’s Driehaus Capital, Drew Cupps’s Cupps Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Godaddy Inc (NYSE:GDDY) but similarly valued. These stocks are Siliconware Precision Industries (ADR) (NASDAQ:SPIL), Team Health Holdings LLC (NYSE:TMH), Euronet Worldwide, Inc. (NASDAQ:EEFT), and Synovus Financial Corp. (NYSE:SNV). This group of stocks’ market caps resemble GDDY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPIL | 10 | 14103 | 0 |
| TMH | 25 | 524520 | 3 |
| EEFT | 24 | 218404 | 0 |
| SNV | 21 | 449718 | -5 |
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $302 million. That figure was just $130 million in GDDY’s case. Team Health Holdings LLC (NYSE:TMH) is leading the pack, whereas Siliconware Precision Industries (ADR) (NASDAQ:SPIL) is the least popular stock from this mix with only 10 bullish hedge fund positions. Godaddy Inc (NYSE:GDDY) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TMH might be a better candidate to consider a long position.
