Hedge Funds Are Betting On Gibraltar Industries Inc (ROCK)
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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Gibraltar Industries Inc (NASDAQ:ROCK).
Is Gibraltar Industries Inc (NASDAQ:ROCK) a buy right now? Investors who are in the know were in an optimistic mood. The number of bullish hedge fund bets moved up by 2 recently. Gibraltar Industries Inc (NASDAQ:ROCK) was in 20 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 23. Our calculations also showed that ROCK isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Ian Wace of Marshall Wace
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 review the recent hedge fund action encompassing Gibraltar Industries Inc (NASDAQ:ROCK).
Do Hedge Funds Think ROCK Is A Good Stock To Buy Now?
At the end of March, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ROCK over the last 23 quarters. With hedgies' sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies has the most valuable position in Gibraltar Industries Inc (NASDAQ:ROCK), worth close to $39.8 million, corresponding to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $29 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish consist of George McCabe's Portolan Capital Management, Seth Cogswell's Running Oak Capital and Charles Paquelet's Skylands Capital. In terms of the portfolio weights assigned to each position Running Oak Capital allocated the biggest weight to Gibraltar Industries Inc (NASDAQ:ROCK), around 1.76% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, setting aside 0.71 percent of its 13F equity portfolio to ROCK.
As one would reasonably expect, key money managers have jumped into Gibraltar Industries Inc (NASDAQ:ROCK) headfirst. Running Oak Capital, managed by Seth Cogswell, created the largest position in Gibraltar Industries Inc (NASDAQ:ROCK). Running Oak Capital had $5.8 million invested in the company at the end of the quarter. Josh Goldberg's G2 Investment Partners Management also initiated a $3.3 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace's Marshall Wace LLP, Israel Englander's Millennium Management, and Matthew Hulsizer's PEAK6 Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Gibraltar Industries Inc (NASDAQ:ROCK). These stocks are Liberty Latin America Ltd. (NASDAQ:LILAK), Liberty Latin America Ltd. (NASDAQ:LILA), J&J Snack Foods Corp. (NASDAQ:JJSF), Herc Holdings Inc. (NYSE:HRI), Alkermes Plc (NASDAQ:ALKS), PriceSmart, Inc. (NASDAQ:PSMT), and Baozun Inc (NASDAQ:BZUN). This group of stocks' market values are closest to ROCK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LILAK,29,512100,-1 LILA,14,121187,-1 JJSF,15,69398,0 HRI,17,954627,2 ALKS,31,595809,1 PSMT,10,32204,-2 BZUN,11,41016,-3 Average,18.1,332334,-0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.1 hedge funds with bullish positions and the average amount invested in these stocks was $332 million. That figure was $115 million in ROCK's case. Alkermes Plc (NASDAQ:ALKS) is the most popular stock in this table. On the other hand PriceSmart, Inc. (NASDAQ:PSMT) is the least popular one with only 10 bullish hedge fund positions. Gibraltar Industries Inc (NASDAQ:ROCK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ROCK is 56.9. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately ROCK wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ROCK were disappointed as the stock returned -21.5% since the end of March (through 7/16) 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.
