Is GPN A Good Stock To Buy Now?

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 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Global Payments Inc (NYSE:GPN)?

Is GPN a good stock to buy now? Global Payments Inc (NYSE:GPN) was in 57 hedge funds’ portfolios at the end of September. The all time high for this statistics is 68. GPN has experienced a decrease in activity from the world’s largest hedge funds lately. There were 66 hedge funds in our database with GPN positions at the end of the second quarter. Our calculations also showed that GPN 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.

If you’d ask most investors, hedge funds are perceived as underperforming, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at present, Our experts choose to focus on the crème de la crème of this group, around 850 funds. These money managers manage bulk of the smart money’s total asset base, and by observing their finest equity investments, Insider Monkey has identified a number of investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .


Lee Ainslie of Maverick 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 let’s take a gander at the fresh hedge fund action encompassing Global Payments Inc (NYSE:GPN).

How have hedgies been trading Global Payments Inc (NYSE:GPN)?

Heading into the fourth quarter of 2020, a total of 57 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GPN over the last 21 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

Is GPN A Good Stock To Buy?

Among these funds, Lone Pine Capital held the most valuable stake in Global Payments Inc (NYSE:GPN), which was worth $1135.6 million at the end of the third quarter. On the second spot was Coatue Management which amassed $675 million worth of shares. Egerton Capital Limited, Matrix Capital Management, and Alkeon Capital Management 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 Value Holdings LP allocated the biggest weight to Global Payments Inc (NYSE:GPN), around 12.06% of its 13F portfolio. Joho Capital is also relatively very bullish on the stock, earmarking 9.19 percent of its 13F equity portfolio to GPN.

Due to the fact that Global Payments Inc (NYSE:GPN) has witnessed declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of fund managers that elected to cut their positions entirely last quarter. It’s worth mentioning that Ravi Chopra’s Azora Capital said goodbye to the biggest position of all the hedgies watched by Insider Monkey, comprising an estimated $35.6 million in stock, and Brandon Haley’s Holocene Advisors was right behind this move, as the fund said goodbye to about $29.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 9 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Global Payments Inc (NYSE:GPN). We will take a look at Northrop Grumman Corporation (NYSE:NOC), Chubb Limited (NYSE:CB), Dollar General Corp. (NYSE:DG), Micron Technology, Inc. (NASDAQ:MU), Truist Financial Corporation (NYSE:TFC), Workday Inc (NYSE:WDAY), and Newmont Corporation (NYSE:NEM). This group of stocks’ market valuations resemble GPN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NOC 42 843121 -5
CB 45 1396414 5
DG 56 1824156 -11
MU 79 4570742 -5
TFC 29 180947 -4
WDAY 74 4396870 1
NEM 55 1951831 0
Average 54.3 2166297 -2.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 54.3 hedge funds with bullish positions and the average amount invested in these stocks was $2166 million. That figure was $4698 million in GPN’s case. Micron Technology, Inc. (NASDAQ:MU) is the most popular stock in this table. On the other hand Truist Financial Corporation (NYSE:TFC) is the least popular one with only 29 bullish hedge fund positions. Global Payments Inc (NYSE:GPN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GPN is 49.1. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. Hedge funds were also right about betting on GPN, though not to the same extent, as the stock returned 10% since Q3 (through December 2nd) and outperformed the market as well.

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