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Hedge Funds Have Never Been This Bullish On Golden Entertainment Inc (GDEN)

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At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not Golden Entertainment Inc (NASDAQ:GDEN) makes for a good investment right now.

Golden Entertainment Inc (NASDAQ:GDEN) was in 23 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 21. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. GDEN investors should be aware of an increase in activity from the world's largest hedge funds of late. There were 21 hedge funds in our database with GDEN positions at the end of the second quarter. Our calculations also showed that GDEN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Richard Driehaus of Driehaus Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now let's check out the recent hedge fund action surrounding Golden Entertainment Inc (NASDAQ:GDEN).

Do Hedge Funds Think GDEN Is A Good Stock To Buy Now?

At third quarter's end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GDEN over the last 25 quarters. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Is GDEN A Good Stock To Buy?
Is GDEN A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Scott Ross's Hill Path Capital has the most valuable position in Golden Entertainment Inc (NASDAQ:GDEN), worth close to $60.9 million, corresponding to 3.2% of its total 13F portfolio. The second most bullish fund manager is Driehaus Capital, managed by Richard Driehaus, which holds a $44.9 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism include Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management, Derek C. Schrier's Indaba Capital Management and Mario Gabelli's GAMCO Investors. In terms of the portfolio weights assigned to each position Hill Path Capital allocated the biggest weight to Golden Entertainment Inc (NASDAQ:GDEN), around 3.16% of its 13F portfolio. Indaba Capital Management is also relatively very bullish on the stock, dishing out 2.57 percent of its 13F equity portfolio to GDEN.

Consequently, specific money managers were leading the bulls' herd. Brant Point Investment Management, managed by Ira Unschuld, established the biggest call position in Golden Entertainment Inc (NASDAQ:GDEN). Brant Point Investment Management had $2.5 million invested in the company at the end of the quarter. Brian Gustavson and Andrew Haley's 1060 Capital Management also made a $1.4 million investment in the stock during the quarter. The other funds with brand new GDEN positions are Peter Algert's Algert Global, Roger Ibbotson's Zebra Capital Management, and Joel Greenblatt's Gotham Asset Management.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Golden Entertainment Inc (NASDAQ:GDEN) but similarly valued. We will take a look at Northern Oil & Gas, Inc. (NYSE:NOG), Weis Markets, Inc. (NYSE:WMK), Lordstown Motors Corp. (NASDAQ:RIDE), Big Lots, Inc. (NYSE:BIG), Eldorado Gold Corp (NYSE:EGO), Northwest Natural Holding Company (NYSE:NWN), and The Joint Corp. (NASDAQ:JYNT). All of these stocks' market caps match GDEN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NOG,19,161182,-1 WMK,16,48341,3 RIDE,12,25920,0 BIG,13,95386,-10 EGO,12,94346,-3 NWN,9,8913,-2 JYNT,22,121403,0 Average,14.7,79356,-1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $248 million in GDEN's case. The Joint Corp. (NASDAQ:JYNT) is the most popular stock in this table. On the other hand Northwest Natural Holding Company (NYSE:NWN) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Golden Entertainment Inc (NASDAQ:GDEN) is more popular among hedge funds. Our overall hedge fund sentiment score for GDEN is 87. 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 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately GDEN wasn't nearly as popular as these 5 stocks and hedge funds that were betting on GDEN were disappointed as the stock returned -3.9% since the end of the third quarter (through 12/9) 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 since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.