Is Goldman Sachs (GS) A Good Stock To Buy Now?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Goldman Sachs Group, Inc. (NYSE:GS).

Is Goldman Sachs Group, Inc. (NYSE:GS) a good stock to buy now? The smart money was buying. The number of bullish hedge fund positions went up by 1 recently. Goldman Sachs Group, Inc. (NYSE:GS) was in 70 hedge funds’ portfolios at the end of September. The all time high for this statistics is 78. Our calculations also showed that GS 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 many signals market participants employ to appraise stocks. Some of the most under-the-radar signals are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can outpace the broader indices by a significant amount (see the details here).


Boykin Curry of Eagle Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium 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 surrounding Goldman Sachs Group, Inc. (NYSE:GS).

How have hedgies been trading Goldman Sachs Group, Inc. (NYSE:GS)?

At third quarter’s end, a total of 70 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 1% from the second quarter of 2020. By comparison, 78 hedge funds held shares or bullish call options in GS a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Eagle Capital Management, managed by Boykin Curry, holds the most valuable position in Goldman Sachs Group, Inc. (NYSE:GS). Eagle Capital Management has a $1.0854 billion position in the stock, comprising 3.9% of its 13F portfolio. Coming in second is Greenhaven Associates, led by Edgar Wachenheim, holding a $597.7 million position; 13.1% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish consist of Ken Fisher’s Fisher Asset Management, and Richard S. Pzena’s Pzena Investment Management. In terms of the portfolio weights assigned to each position Tegean Capital Management allocated the biggest weight to Goldman Sachs Group, Inc. (NYSE:GS), around 22.75% of its 13F portfolio. Greenhaven Associates is also relatively very bullish on the stock, setting aside 13.13 percent of its 13F equity portfolio to GS.

As one would reasonably expect, some big names have been driving this bullishness. Levin Easterly Partners, managed by John Murphy, created the most outsized position in Goldman Sachs Group, Inc. (NYSE:GS). Levin Easterly Partners had $78.1 million invested in the company at the end of the quarter. James Parsons’s Junto Capital Management also made a $59.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Gregg Moskowitz’s Interval Partners, Leonard Green’s Leonard Green & Partners, and Renaissance Technologies.

Let’s go over hedge fund activity in other stocks similar to Goldman Sachs Group, Inc. (NYSE:GS). These stocks are Fiserv, Inc. (NASDAQ:FISV), Anthem Inc (NYSE:ANTM), Becton, Dickinson and Company (NYSE:BDX), Equinix Inc (NASDAQ:EQIX), The TJX Companies, Inc. (NYSE:TJX), Dominion Energy Inc. (NYSE:D), and Colgate-Palmolive Company (NYSE:CL). All of these stocks’ market caps match GS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FISV 90 5404170 5
ANTM 65 4505466 -4
BDX 62 1939356 9
EQIX 42 2270352 -7
TJX 78 2853294 6
D 37 967030 4
CL 47 1540716 -3
Average 60.1 2782912 1.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 60.1 hedge funds with bullish positions and the average amount invested in these stocks was $2783 million. That figure was $3634 million in GS’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand Dominion Energy Inc. (NYSE:D) is the least popular one with only 37 bullish hedge fund positions. Goldman Sachs Group, Inc. (NYSE:GS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GS is 64.1. 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 November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on GS as the stock returned 17.1% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Follow Goldman Sachs Group Inc (NYSE:GS)

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