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Is GBT Stock A Buy or Sell?

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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 887 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article we look at what those investors think of Global Blood Therapeutics Inc (NASDAQ:GBT).

Is GBT stock a buy? Global Blood Therapeutics Inc (NASDAQ:GBT) has seen a decrease in support from the world's most elite money managers of late. Global Blood Therapeutics Inc (NASDAQ:GBT) was in 26 hedge funds' portfolios at the end of December. The all time high for this statistic is 31. There were 29 hedge funds in our database with GBT positions at the end of the third quarter. Our calculations also showed that GBT isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Felix Baker - Baker Bros.
Felix Baker - Baker Bros.

Felix Baker of Baker Bros.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 view the recent hedge fund action surrounding Global Blood Therapeutics Inc (NASDAQ:GBT).

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

At Q4's end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GBT over the last 22 quarters. With hedgies' capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Is GBT A Good Stock To Buy?
Is GBT A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Perceptive Advisors, managed by Joseph Edelman, holds the largest position in Global Blood Therapeutics Inc (NASDAQ:GBT). Perceptive Advisors has a $245.8 million position in the stock, comprising 2.6% of its 13F portfolio. The second most bullish fund manager is Julian Baker and Felix Baker of Baker Bros. Advisors, with a $39.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Eli Casdin's Casdin Capital, Jeffrey Jay and David Kroin's Great Point Partners and Brian Ashford-Russell and Tim Woolley's Polar Capital. In terms of the portfolio weights assigned to each position Great Point Partners allocated the biggest weight to Global Blood Therapeutics Inc (NASDAQ:GBT), around 4.19% of its 13F portfolio. Arctis Global is also relatively very bullish on the stock, dishing out 2.74 percent of its 13F equity portfolio to GBT.

Because Global Blood Therapeutics Inc (NASDAQ:GBT) has witnessed declining sentiment from the entirety of the hedge funds we track, it's easy to see that there were a few funds that decided to sell off their positions entirely heading into Q1. It's worth mentioning that Arsani William's Logos Capital sold off the largest investment of all the hedgies tracked by Insider Monkey, comprising an estimated $46.9 million in stock. Farallon Capital, also said goodbye to its stock, about $33.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds heading into Q1.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Global Blood Therapeutics Inc (NASDAQ:GBT) but similarly valued. These stocks are Insight Enterprises, Inc. (NASDAQ:NSIT), Graham Holdings Co (NYSE:GHC), Integer Holdings Corporation (NYSE:ITGR), Hilton Grand Vacations Inc. (NYSE:HGV), Atlas Corp. (NYSE:ATCO), Commscope Holding Company Inc (NASDAQ:COMM), and Utz Brands Inc (NYSE:UTZ). All of these stocks' market caps resemble GBT's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NSIT,19,82328,-3 GHC,25,502393,1 ITGR,24,224855,2 HGV,31,759573,-1 ATCO,18,1134798,8 COMM,35,643538,5 UTZ,15,101186,0 Average,23.9,492667,1.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $493 million. That figure was $455 million in GBT's case. Commscope Holding Company Inc (NASDAQ:COMM) is the most popular stock in this table. On the other hand Utz Brands Inc (NYSE:UTZ) is the least popular one with only 15 bullish hedge fund positions. Global Blood Therapeutics Inc (NASDAQ:GBT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GBT is 54.7. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately GBT wasn't nearly as popular as these 30 stocks and hedge funds that were betting on GBT were disappointed as the stock returned -5.8% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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

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