The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards The Goldman Sachs Group, Inc. (NYSE:GS).
Is GS stock a buy or sell? The Goldman Sachs Group, Inc. (NYSE:GS) has seen an increase in support from the world’s most elite money managers recently. The Goldman Sachs Group, Inc. (NYSE:GS) was in 76 hedge funds’ portfolios at the end of December. The all time high for this statistic is 78. There were 70 hedge funds in our database with GS holdings at the end of September. Our calculations also showed that GS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best hydrogen fuel cell 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. 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 homepage (or at the end of this article). Keeping this in mind we’re going to take a peek at the fresh hedge fund action encompassing The Goldman Sachs Group, Inc. (NYSE:GS).
Do Hedge Funds Think GS Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 76 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from one quarter earlier. By comparison, 75 hedge funds held shares or bullish call options in GS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Eagle Capital Management was the largest shareholder of The Goldman Sachs Group, Inc. (NYSE:GS), with a stake worth $1375.8 million reported as of the end of December. Trailing Eagle Capital Management was Greenhaven Associates, which amassed a stake valued at $808.1 million. Fisher Asset Management, Pzena Investment Management, and Azora 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 Greenhaven Associates allocated the biggest weight to The Goldman Sachs Group, Inc. (NYSE:GS), around 15.22% of its 13F portfolio. Azora Capital is also relatively very bullish on the stock, setting aside 12.87 percent of its 13F equity portfolio to GS.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. GMT Capital, managed by Thomas E. Claugus, assembled the biggest position in The Goldman Sachs Group, Inc. (NYSE:GS). GMT Capital had $57.6 million invested in the company at the end of the quarter. Robert Pohly’s Samlyn Capital also made a $51.4 million investment in the stock during the quarter. The other funds with brand new GS positions are Ray Dalio’s Bridgewater Associates, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and Joe DiMenna’s ZWEIG DIMENNA PARTNERS.
Let’s check out hedge fund activity in other stocks similar to The Goldman Sachs Group, Inc. (NYSE:GS). We will take a look at Uber Technologies, Inc. (NYSE:UBER), CVS Health Corporation (NYSE:CVS), Target Corporation (NYSE:TGT), Fidelity National Information Services Inc. (NYSE:FIS), 0, British American Tobacco plc (NYSE:BTI), and Vale SA (NYSE:VALE). This group of stocks’ market caps resemble GS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 67.1 hedge funds with bullish positions and the average amount invested in these stocks was $4236 million. That figure was $4608 million in GS’s case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 10 bullish hedge fund positions. The 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 65.6. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on GS as the stock returned 32.8% since the end of Q4 (through 3/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.