Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 817 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Great Southern Bancorp, Inc. (NASDAQ:GSBC).
Is GSBC a good stock to buy now? GSBC investors should be aware of a decrease in hedge fund sentiment in recent months. Great Southern Bancorp, Inc. (NASDAQ:GSBC) was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 12. Our calculations also showed that GSBC 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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 scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Keeping this in mind we’re going to take a glance at the key hedge fund action encompassing Great Southern Bancorp, Inc. (NASDAQ:GSBC).
What have hedge funds been doing with Great Southern Bancorp, Inc. (NASDAQ:GSBC)?
At the end of September, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -30% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in GSBC a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, founded by Jim Simons, holds the biggest position in Great Southern Bancorp, Inc. (NASDAQ:GSBC). Renaissance Technologies has a $13 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Cliff Asness of AQR Capital Management, with a $2.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Harding’s Winton Capital Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Great Southern Bancorp, Inc. (NASDAQ:GSBC), around 0.03% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to GSBC.
Judging by the fact that Great Southern Bancorp, Inc. (NASDAQ:GSBC) has faced falling interest from the smart money, logic holds that there exists a select few hedge funds that elected to cut their positions entirely by the end of the third quarter. Interestingly, Peter Muller’s PDT Partners said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, worth about $0.6 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also sold off its stock, about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to Great Southern Bancorp, Inc. (NASDAQ:GSBC). We will take a look at NGL Energy Partners LP (NYSE:NGL), Aprea Therapeutics, Inc. (NASDAQ:APRE), Berkshire Hills Bancorp, Inc. (NYSE:BHLB), United Fire Group, Inc. (NASDAQ:UFCS), Banc of California, Inc. (NYSE:BANC), PBF Logistics LP (NYSE:PBFX), and U.S. Lime & Minerals Inc. (NASDAQ:USLM). All of these stocks’ market caps are similar to GSBC’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 7.6 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $21 million in GSBC’s case. Berkshire Hills Bancorp, Inc. (NYSE:BHLB) is the most popular stock in this table. On the other hand NGL Energy Partners LP (NYSE:NGL) is the least popular one with only 2 bullish hedge fund positions. Great Southern Bancorp, Inc. (NASDAQ:GSBC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GSBC is 42.2. 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. A small number of hedge funds were also right about betting on GSBC as the stock returned 31.6% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.