Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors' favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the third quarter. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds' top consensus picks. This year hedge funds' top 20 stock picks outperformed the S&P 500 Index by 9.9 percentage points through the end of November. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Glacier Bancorp, Inc. (NASDAQ:GBCI) has experienced a decrease in support from the world's most elite money managers of late. GBCI was in 13 hedge funds' portfolios at the end of the third quarter of 2019. There were 17 hedge funds in our database with GBCI positions at the end of the previous quarter. Our calculations also showed that GBCI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to take a glance at the key hedge fund action encompassing Glacier Bancorp, Inc. (NASDAQ:GBCI).
Hedge fund activity in Glacier Bancorp, Inc. (NASDAQ:GBCI)
Heading into the fourth quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -24% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GBCI over the last 17 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Glacier Bancorp, Inc. (NASDAQ:GBCI). Fisher Asset Management has a $27.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $5.3 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 include Dmitry Balyasny's Balyasny Asset Management, Mark Lee's Forest Hill Capital and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Glacier Bancorp, Inc. (NASDAQ:GBCI), around 1.27% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, earmarking 0.12 percent of its 13F equity portfolio to GBCI.
Since Glacier Bancorp, Inc. (NASDAQ:GBCI) has experienced a decline in interest from the smart money, logic holds that there lies a certain "tier" of funds who were dropping their full holdings in the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dropped the largest investment of the "upper crust" of funds watched by Insider Monkey, totaling close to $2.1 million in stock. Renaissance Technologies, also cut its stock, about $1.9 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Glacier Bancorp, Inc. (NASDAQ:GBCI) but similarly valued. We will take a look at LogMeIn Inc (NASDAQ:LOGM), United Therapeutics Corporation (NASDAQ:UTHR), Univar Inc (NYSE:UNVR), and Medallia, Inc. (NYSE:MDLA). All of these stocks' market caps are similar to GBCI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LOGM,29,295210,2 UTHR,30,1131522,0 UNVR,37,1331993,6 MDLA,23,250641,23 Average,29.75,752342,7.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $752 million. That figure was $48 million in GBCI's case. Univar Inc (NYSE:UNVR) is the most popular stock in this table. On the other hand Medallia, Inc. (NYSE:MDLA) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Glacier Bancorp, Inc. (NASDAQ:GBCI) is even less popular than MDLA. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on GBCI, though not to the same extent, as the stock returned 9.2% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.