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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 have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Garmin Ltd. (NASDAQ:GRMN) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is GRMN stock a buy? Prominent investors were cutting their exposure. The number of long hedge fund bets went down by 5 lately. Garmin Ltd. (NASDAQ:GRMN) was in 27 hedge funds' portfolios at the end of December. The all time high for this statistic is 32. Our calculations also showed that GRMN isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
David E. Shaw of D.E. Shaw
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now 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 check out the fresh hedge fund action encompassing Garmin Ltd. (NASDAQ:GRMN).
Do Hedge Funds Think GRMN Is A Good Stock To Buy Now?
At fourth quarter's end, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GRMN over the last 22 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness's AQR Capital Management has the largest position in Garmin Ltd. (NASDAQ:GRMN), worth close to $167.3 million, amounting to 0.3% of its total 13F portfolio. The second largest stake is held by Select Equity Group, managed by Robert Joseph Caruso, which holds a $78.6 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism comprise D. E. Shaw's D E Shaw, Paul Marshall and Ian Wace's Marshall Wace LLP and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position G2 Investment Partners Management allocated the biggest weight to Garmin Ltd. (NASDAQ:GRMN), around 0.89% of its 13F portfolio. Potrero Capital Research is also relatively very bullish on the stock, earmarking 0.84 percent of its 13F equity portfolio to GRMN.
Due to the fact that Garmin Ltd. (NASDAQ:GRMN) has faced falling interest from the entirety of the hedge funds we track, it's easy to see that there lies a certain "tier" of funds who were dropping their entire stakes heading into Q1. It's worth mentioning that John Brennan's Sirios Capital Management dropped the biggest stake of the "upper crust" of funds followed by Insider Monkey, worth close to $6.5 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund dumped about $3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 5 funds heading into Q1.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Garmin Ltd. (NASDAQ:GRMN) but similarly valued. These stocks are Ryanair Holdings plc (NASDAQ:RYAAY), FleetCor Technologies, Inc. (NYSE:FLT), Coca-Cola European Partners plc (NYSE:CCEP), Viatris Inc. (NASDAQ:VTRS), MPLX LP (NYSE:MPLX), Deutsche Bank AG (NYSE:DB), and Wayfair Inc (NYSE:W). This group of stocks' market caps are closest to GRMN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RYAAY,23,782186,7 FLT,44,2029777,4 CCEP,28,1003000,5 VTRS,67,2753638,19 MPLX,13,142057,-1 DB,16,1649538,1 W,40,2845135,0 Average,33,1600762,5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1601 million. That figure was $516 million in GRMN's case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand MPLX LP (NYSE:MPLX) is the least popular one with only 13 bullish hedge fund positions. Garmin Ltd. (NASDAQ:GRMN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GRMN is 38.3. 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 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 still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on GRMN as the stock returned 18% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.