In this article we will analyze whether Granite Construction Incorporated (NYSE:GVA) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is GVA a good stock to buy now? Hedge funds were becoming hopeful. The number of bullish hedge fund bets increased by 1 lately. Granite Construction Incorporated (NYSE:GVA) was in 14 hedge funds’ portfolios at the end of September. The all time high for this statistic is 19. Our calculations also showed that GVA 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). There were 13 hedge funds in our database with GVA holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are numerous tools shareholders have at their disposal to grade stocks. A couple of the most innovative tools are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite money managers can trounce the market by a superb amount (see the details here).
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. Now we’re going to review the recent hedge fund action surrounding Granite Construction Incorporated (NYSE:GVA).
Do Hedge Funds Think GVA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in GVA over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the number one position in Granite Construction Incorporated (NYSE:GVA). Adage Capital Management has a $5.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Ken Griffin of Citadel Investment Group, with a $4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism comprise D. E. Shaw’s D E Shaw, David Park’s Headlands Capital and Peter Schliemann’s Rutabaga Capital Management. In terms of the portfolio weights assigned to each position Headlands Capital allocated the biggest weight to Granite Construction Incorporated (NYSE:GVA), around 3.82% of its 13F portfolio. Rutabaga Capital Management is also relatively very bullish on the stock, earmarking 2.05 percent of its 13F equity portfolio to GVA.
As one would reasonably expect, key hedge funds have jumped into Granite Construction Incorporated (NYSE:GVA) headfirst. Renaissance Technologies, initiated the most valuable position in Granite Construction Incorporated (NYSE:GVA). Renaissance Technologies had $1.2 million invested in the company at the end of the quarter. Nelson Obus’s Wynnefield Capital also initiated a $0.5 million position during the quarter. The following funds were also among the new GVA investors: Donald Sussman’s Paloma Partners and Jay Petschek and Steven Major’s Corsair Capital Management.
Let’s check out hedge fund activity in other stocks similar to Granite Construction Incorporated (NYSE:GVA). We will take a look at Archrock, Inc. (NYSE:AROC), Delek US Holdings, Inc. (NYSE:DK), Mobileiron Inc (NASDAQ:MOBL), BellRing Brands, Inc. (NYSE:BRBR), Dillard’s, Inc. (NYSE:DDS), Green Brick Partners Inc (NASDAQ:GRBK), and United Natural Foods, Inc. (NASDAQ:UNFI). This group of stocks’ market valuations are similar to GVA’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $151 million. That figure was $27 million in GVA’s case. Mobileiron Inc (NASDAQ:MOBL) is the most popular stock in this table. On the other hand Archrock, Inc. (NYSE:AROC) is the least popular one with only 10 bullish hedge fund positions. Granite Construction Incorporated (NYSE:GVA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GVA is 41.4. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on GVA as the stock returned 54.5% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.