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Is Gentex Corporation (GNTX) Going to Burn These Hedge Funds?

·6 min read

We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of Gentex Corporation (NASDAQ:GNTX) based on that data.

Gentex Corporation (NASDAQ:GNTX) has seen a decrease in activity from the world's largest hedge funds recently. Gentex Corporation (NASDAQ:GNTX) was in 35 hedge funds' portfolios at the end of March. The all time high for this statistic is 40. There were 36 hedge funds in our database with GNTX positions at the end of the fourth quarter. Our calculations also showed that GNTX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you'd ask most investors, hedge funds are viewed as slow, outdated investment tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, Our researchers look at the top tier of this group, around 850 funds. Most estimates calculate that this group of people administer most of the hedge fund industry's total asset base, and by keeping an eye on their unrivaled picks, Insider Monkey has come up with many investment strategies that have historically outpaced the S&P 500 index. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

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At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we're going to go over the fresh hedge fund action encompassing Gentex Corporation (NASDAQ:GNTX).

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

At first quarter's end, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the previous quarter. By comparison, 37 hedge funds held shares or bullish call options in GNTX a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Gentex Corporation (NASDAQ:GNTX) was held by Renaissance Technologies, which reported holding $94.2 million worth of stock at the end of December. It was followed by AQR Capital Management with a $74.4 million position. Other investors bullish on the company included D E Shaw, Royce & Associates, and Nitorum Capital. In terms of the portfolio weights assigned to each position Nitorum Capital allocated the biggest weight to Gentex Corporation (NASDAQ:GNTX), around 2.76% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, setting aside 1.05 percent of its 13F equity portfolio to GNTX.

Due to the fact that Gentex Corporation (NASDAQ:GNTX) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there was a specific group of funds who were dropping their positions entirely heading into Q2. At the top of the heap, Steve Cohen's Point72 Asset Management said goodbye to the largest investment of the 750 funds followed by Insider Monkey, worth close to $32.4 million in stock. Dmitry Balyasny's fund, Balyasny Asset Management, also dumped its stock, about $7.5 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q2.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Gentex Corporation (NASDAQ:GNTX) but similarly valued. We will take a look at West Fraser Timber Co. Ltd. (NYSE:WFG), Vornado Realty Trust (NYSE:VNO), Mirati Therapeutics, Inc. (NASDAQ:MRTX), Carlisle Companies, Inc. (NYSE:CSL), Service Corporation International (NYSE:SCI), GSX Techedu Inc. (NYSE:GSX), and Alaska Air Group, Inc. (NYSE:ALK). This group of stocks' market caps are closest to GNTX's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WFG,25,580726,25 VNO,25,216181,2 MRTX,57,2867424,1 CSL,18,186375,1 SCI,23,709728,-5 GSX,30,277849,13 ALK,32,587935,-3 Average,30,775174,4.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $775 million. That figure was $538 million in GNTX's case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Carlisle Companies, Inc. (NYSE:CSL) is the least popular one with only 18 bullish hedge fund positions. Gentex Corporation (NASDAQ:GNTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GNTX is 52. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately GNTX wasn't nearly as popular as these 5 stocks and hedge funds that were betting on GNTX were disappointed as the stock returned -6% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 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.