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In this article you are going to find out whether hedge funds think Greenpro Capital Corp. (NASDAQ:GRNQ) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is GRNQ a good stock to buy? The smart money was getting more bullish. The number of bullish hedge fund positions went up by 2 recently. Greenpro Capital Corp. (NASDAQ:GRNQ) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic was previously 1. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GRNQ isn't among the 30 most popular stocks among hedge funds (click for Q1 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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $30 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. Now we're going to take a glance at the fresh hedge fund action regarding Greenpro Capital Corp. (NASDAQ:GRNQ).
Do Hedge Funds Think GRNQ Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in GRNQ a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Greenpro Capital Corp. (NASDAQ:GRNQ) was held by Citadel Investment Group, which reported holding $0.3 million worth of stock at the end of December. It was followed by Paloma Partners with a $0.2 million position. The only other hedge fund that is bullish on the company was PEAK6 Capital Management.
Consequently, some big names were leading the bulls' herd. Paloma Partners, managed by Donald Sussman, assembled the most valuable position in Greenpro Capital Corp. (NASDAQ:GRNQ). Paloma Partners had $0.2 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also made a $0.1 million investment in the stock during the quarter.
Let's now take a look at hedge fund activity in other stocks similar to Greenpro Capital Corp. (NASDAQ:GRNQ). We will take a look at Oriental Culture Holding LTD (NASDAQ:OCG), Meridian Corporation (NASDAQ:MRBK), Cherry Hill Mortgage Investment Corp (NYSE:CHMI), Fennec Pharmaceuticals Inc. (NASDAQ:FENC), Bank7 Corp. (NASDAQ:BSVN), First Savings Financial Group, Inc. (NASDAQ:FSFG), and Palatin Technologies, Inc. (NYSE:PTN). This group of stocks' market caps match GRNQ's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OCG,2,573,1 MRBK,5,9824,2 CHMI,4,11164,-3 FENC,6,62743,0 BSVN,2,789,0 FSFG,3,3568,1 PTN,2,192,-4 Average,3.4,12693,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.4 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $1 million in GRNQ's case. Fennec Pharmaceuticals Inc. (NASDAQ:FENC) is the most popular stock in this table. On the other hand Oriental Culture Holding LTD (NASDAQ:OCG) is the least popular one with only 2 bullish hedge fund positions. Greenpro Capital Corp. (NASDAQ:GRNQ) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GRNQ is 49.5. 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 negative signal and 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately GRNQ wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GRNQ investors were disappointed as the stock returned -44.4% since the end of March (through 6/11) 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 most of these stocks already outperformed the market in 2021.
Disclosure: None. This article was originally published at Insider Monkey.