Where Do Hedge Funds Stand On Globe Life (GL)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Globe Life Inc. (NYSE:GL).

Is Globe Life Inc. (NYSE:GL) a good investment today? The smart money was in a pessimistic mood. The number of bullish hedge fund positions went down by 2 in recent months. Globe Life Inc. (NYSE:GL) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 33. Our calculations also showed that GL 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.

To most stock holders, hedge funds are viewed as underperforming, old investment tools of yesteryear. While there are greater than 8000 funds in operation at present, Our researchers look at the top tier of this group, around 850 funds. It is estimated that this group of investors shepherd the lion’s share of the hedge fund industry’s total capital, and by tracking their top picks, Insider Monkey has formulated various investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a 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 .

Alex Litowitz Magnetar Capital

Alec Litowitz of Magnetar Capital

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 let’s view the latest hedge fund action regarding Globe Life Inc. (NYSE:GL).

Do Hedge Funds Think GL Is A Good Stock To Buy Now?

At the end of September, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in GL a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the number one position in Globe Life Inc. (NYSE:GL). Berkshire Hathaway has a $507.7 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Ken Griffin of Citadel Investment Group, with a $128.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish contain Richard S. Pzena’s Pzena Investment Management, John D. Gillespie’s Prospector Partners and Renaissance Technologies. In terms of the portfolio weights assigned to each position Hi-Line Capital Management allocated the biggest weight to Globe Life Inc. (NYSE:GL), around 2.74% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, earmarking 2.69 percent of its 13F equity portfolio to GL.

Since Globe Life Inc. (NYSE:GL) has faced falling interest from hedge fund managers, it’s easy to see that there were a few funds who were dropping their full holdings heading into Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dumped the biggest investment of the “upper crust” of funds watched by Insider Monkey, totaling close to $7.6 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also said goodbye to its stock, about $7.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Globe Life Inc. (NYSE:GL) but similarly valued. These stocks are MGM Growth Properties LLC (NYSE:MGP), Five9 Inc (NASDAQ:FIVN), LKQ Corporation (NASDAQ:LKQ), NiSource Inc. (NYSE:NI), Formula One Group (NASDAQ:FWONK), Henry Schein, Inc. (NASDAQ:HSIC), and Pinnacle West Capital Corporation (NYSE:PNW). All of these stocks’ market caps resemble GL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MGP 30 470854 -2
FIVN 47 1328168 3
LKQ 51 1384655 7
NI 24 306055 3
FWONK 40 1464422 -9
HSIC 40 1233636 7
PNW 22 404432 -3
Average 36.3 941746 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.3 hedge funds with bullish positions and the average amount invested in these stocks was $942 million. That figure was $751 million in GL’s case. LKQ Corporation (NASDAQ:LKQ) is the most popular stock in this table. On the other hand Pinnacle West Capital Corporation (NYSE:PNW) is the least popular one with only 22 bullish hedge fund positions. Globe Life Inc. (NYSE:GL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GL is 46.7. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on GL as the stock returned 16.4% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.

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