The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtGol Linhas Aereas Inteligentes SA (NYSE:GOL) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Gol Linhas Aereas Inteligentes SA (NYSE:GOL) has experienced a decrease in enthusiasm from smart money lately. GOL was in 11 hedge funds' portfolios at the end of the first quarter of 2020. There were 12 hedge funds in our database with GOL positions at the end of the previous quarter. Our calculations also showed that GOL 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). Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most stock holders, hedge funds are perceived as worthless, old investment vehicles of yesteryear. While there are more than 8000 funds trading at present, Our researchers look at the aristocrats of this club, around 850 funds. Most estimates calculate that this group of people direct the majority of all hedge funds' total capital, and by tracking their best investments, Insider Monkey has determined many investment strategies that have historically outpaced the market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_324853" align="aligncenter" width="400"] Joshua Friedman of Canyon Capital Advisors[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a look at the recent hedge fund action encompassing Gol Linhas Aereas Inteligentes SA (NYSE:GOL).
What have hedge funds been doing with Gol Linhas Aereas Inteligentes SA (NYSE:GOL)?
Heading into the second quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GOL over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Contrarian Capital was the largest shareholder of Gol Linhas Aereas Inteligentes SA (NYSE:GOL), with a stake worth $24.2 million reported as of the end of September. Trailing Contrarian Capital was Renaissance Technologies, which amassed a stake valued at $12 million. Two Sigma Advisors, Maverick Capital, and Farallon Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Contrarian Capital allocated the biggest weight to Gol Linhas Aereas Inteligentes SA (NYSE:GOL), around 12.67% of its 13F portfolio. Maverick Capital is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to GOL.
Since Gol Linhas Aereas Inteligentes SA (NYSE:GOL) has faced declining sentiment from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of funds who sold off their entire stakes by the end of the first quarter. Intriguingly, Michael Platt and William Reeves's BlueCrest Capital Mgmt. sold off the largest investment of the 750 funds followed by Insider Monkey, worth an estimated $2.5 million in stock. Joshua Friedman and Mitchell Julis's fund, Canyon Capital Advisors, also cut its stock, about $1.6 million worth. These transactions are important to note, as total hedge fund interest was cut by 1 funds by the end of the first quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Gol Linhas Aereas Inteligentes SA (NYSE:GOL) but similarly valued. We will take a look at Avaya Holdings Corp. (NYSE:AVYA), Krystal Biotech, Inc. (NASDAQ:KRYS), Cerus Corporation (NASDAQ:CERS), and Teekay Tankers Ltd. (NYSE:TNK). This group of stocks' market valuations resemble GOL's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AVYA,27,142047,-12 KRYS,9,188739,0 CERS,17,105927,5 TNK,21,66975,2 Average,18.5,125922,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $126 million. That figure was $40 million in GOL's case. Avaya Holdings Corp. (NYSE:AVYA) is the most popular stock in this table. On the other hand Krystal Biotech, Inc. (NASDAQ:KRYS) is the least popular one with only 9 bullish hedge fund positions. Gol Linhas Aereas Inteligentes SA (NYSE:GOL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on GOL as the stock returned 58.8% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.