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 Western Bancorp Inc (NYSE:GWB).
Is Great Western Bancorp Inc (NYSE:GWB) a marvelous investment today? Money managers were becoming less hopeful. The number of bullish hedge fund positions shrunk by 4 lately. Great Western Bancorp Inc (NYSE:GWB) was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 24. Our calculations also showed that GWB 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.
In the financial world there are tons of tools market participants use to analyze stocks. A pair of the less known tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top 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 analyze the new hedge fund action surrounding Great Western Bancorp Inc (NYSE:GWB).
Do Hedge Funds Think GWB Is A Good Stock To Buy Now?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GWB over the last 21 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Great Western Bancorp Inc (NYSE:GWB), which was worth $10.5 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $6.1 million worth of shares. D E Shaw, Millennium Management, and Fourthstone LLC 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 Fourthstone LLC allocated the biggest weight to Great Western Bancorp Inc (NYSE:GWB), around 1.06% of its 13F portfolio. Algert Global is also relatively very bullish on the stock, earmarking 0.18 percent of its 13F equity portfolio to GWB.
Seeing as Great Western Bancorp Inc (NYSE:GWB) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedgies who were dropping their positions entirely heading into Q4. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest stake of all the hedgies tracked by Insider Monkey, totaling an estimated $1.4 million in stock. Hoon Kim’s fund, Quantinno Capital, also dropped its stock, about $0.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 4 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Great Western Bancorp Inc (NYSE:GWB) but similarly valued. These stocks are PBF Energy Inc (NYSE:PBF), PDF Solutions, Inc. (NASDAQ:PDFS), Brookline Bancorp, Inc. (NASDAQ:BRKL), Oaktree Specialty Lending Corporation (NASDAQ:OCSL), Oxford Industries, Inc. (NYSE:OXM), Tivity Health, Inc. (NASDAQ:TVTY), and American Finance Trust, Inc. (NASDAQ:AFIN). This group of stocks’ market values are similar to GWB’s market value.
|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 12.7 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $28 million in GWB’s case. Tivity Health, Inc. (NASDAQ:TVTY) is the most popular stock in this table. On the other hand Oxford Industries, Inc. (NYSE:OXM) is the least popular one with only 8 bullish hedge fund positions. Great Western Bancorp Inc (NYSE:GWB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GWB is 51.8. 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. Hedge funds were also right about betting on GWB as the stock returned 49.2% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.