Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Global Net Lease, Inc. (NYSE:GNL) based on that data.
Is Global Net Lease, Inc. (NYSE:GNL) worth your attention right now? The smart money is becoming less confident. The number of long hedge fund positions fell by 3 lately. Our calculations also showed that GNL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). GNL was in 7 hedge funds' portfolios at the end of the first quarter of 2020. There were 10 hedge funds in our database with GNL positions at the end of the previous quarter. Video: 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_258236" align="aligncenter" width="393"] Ken Griffin of Citadel Investment Group[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to view the recent hedge fund action encompassing Global Net Lease, Inc. (NYSE:GNL).
What have hedge funds been doing with Global Net Lease, Inc. (NYSE:GNL)?
Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -30% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GNL over the last 18 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the biggest position in Global Net Lease, Inc. (NYSE:GNL). Renaissance Technologies has a $8.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Winton Capital Management, led by David Harding, holding a $6.2 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining peers that are bullish consist of Lawrence Raiman's LDR Capital, Ken Griffin's Citadel Investment Group and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position LDR Capital allocated the biggest weight to Global Net Lease, Inc. (NYSE:GNL), around 9.23% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, setting aside 0.16 percent of its 13F equity portfolio to GNL.
Judging by the fact that Global Net Lease, Inc. (NYSE:GNL) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there lies a certain "tier" of funds that decided to sell off their entire stakes last quarter. Interestingly, Dmitry Balyasny's Balyasny Asset Management said goodbye to the biggest position of the "upper crust" of funds followed by Insider Monkey, valued at an estimated $3.4 million in stock. Steve Cohen's fund, Point72 Asset Management, also cut its stock, about $1.2 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Global Net Lease, Inc. (NYSE:GNL) but similarly valued. These stocks are Regenxbio Inc (NASDAQ:RGNX), Veracyte Inc (NASDAQ:VCYT), Cinemark Holdings, Inc. (NYSE:CNK), and BMC Stock Holdings, Inc. (NASDAQ:BMCH). This group of stocks' market values are closest to GNL's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RGNX,19,185637,0 VCYT,12,58406,-2 CNK,27,190636,5 BMCH,23,210249,-6 Average,20.25,161232,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $161 million. That figure was $25 million in GNL's case. Cinemark Holdings, Inc. (NYSE:CNK) is the most popular stock in this table. On the other hand Veracyte Inc (NASDAQ:VCYT) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Global Net Lease, Inc. (NYSE:GNL) is even less popular than VCYT. Hedge funds dodged a bullet by taking a bearish stance towards GNL. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately GNL wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); GNL investors were disappointed as the stock returned 23.4% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.