Is Graphic Packaging Holding Company (GPK) A Good Stock To Buy ?

We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Graphic Packaging Holding Company (NYSE:GPK).

Graphic Packaging Holding Company (NYSE:GPK) was in 33 hedge funds’ portfolios at the end of the third quarter of 2019. GPK investors should pay attention to an increase in hedge fund sentiment recently. There were 30 hedge funds in our database with GPK holdings at the end of the previous quarter. Our calculations also showed that GPK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

According to most stock holders, hedge funds are perceived as worthless, outdated investment tools of years past. While there are more than 8000 funds trading at the moment, Our experts choose to focus on the moguls of this club, approximately 750 funds. Most estimates calculate that this group of people shepherd bulk of the smart money’s total capital, and by watching their unrivaled investments, Insider Monkey has discovered a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .


Lee Ainslie of Maverick Capital

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the key hedge fund action regarding Graphic Packaging Holding Company (NYSE:GPK).

How are hedge funds trading Graphic Packaging Holding Company (NYSE:GPK)?

At Q3’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 25 hedge funds with a bullish position in GPK a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).


Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Graphic Packaging Holding Company (NYSE:GPK). Citadel Investment Group has a $152.9 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Maverick Capital, led by Lee Ainslie, holding a $137.9 million position; the fund has 2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions encompass Andrew Kurita’s Kettle Hill Capital Management, David E. Shaw’s D E Shaw and Michael O’Keefe’s 12th Street Asset Management. In terms of the portfolio weights assigned to each position Kettle Hill Capital Management allocated the biggest weight to Graphic Packaging Holding Company (NYSE:GPK), around 11.31% of its portfolio. 12th Street Asset Management is also relatively very bullish on the stock, setting aside 5.97 percent of its 13F equity portfolio to GPK.

As one would reasonably expect, key hedge funds have jumped into Graphic Packaging Holding Company (NYSE:GPK) headfirst. York Capital Management, managed by James Dinan, initiated the most valuable position in Graphic Packaging Holding Company (NYSE:GPK). York Capital Management had $12.2 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $3 million position during the quarter. The other funds with brand new GPK positions are Peter Muller’s PDT Partners, Benjamin A. Smith’s Laurion Capital Management, and Michael Gelband’s ExodusPoint Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Graphic Packaging Holding Company (NYSE:GPK) but similarly valued. We will take a look at Healthcare Realty Trust Inc (NYSE:HR), Webster Financial Corporation (NYSE:WBS), Telecom Argentina S.A. (NYSE:TEO), and Spirit Realty Capital Inc (NYSE:SRC). All of these stocks’ market caps match GPK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HR 12 44639 3
WBS 22 337629 0
TEO 4 29115 1
SRC 18 147316 -5
Average 14 139675 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $140 million. That figure was $500 million in GPK’s case. Webster Financial Corporation (NYSE:WBS) is the most popular stock in this table. On the other hand Telecom Argentina S.A. (NYSE:TEO) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Graphic Packaging Holding Company (NYSE:GPK) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on GPK, though not to the same extent, as the stock returned 10.3% during the fourth quarter (through the end of November) and outperformed the market as well.

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