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 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Gamco Investors Inc. (NYSE:GBL) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Gamco Investors Inc. (NYSE:GBL) shareholders have witnessed a decrease in hedge fund interest lately. Gamco Investors Inc. (NYSE:GBL) was in 4 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 11. There were 7 hedge funds in our database with GBL positions at the end of the fourth quarter. Our calculations also showed that GBL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 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 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Michael Price of MFP Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. 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. With all of this in mind we're going to take a glance at the fresh hedge fund action regarding Gamco Investors Inc. (NYSE:GBL).
Do Hedge Funds Think GBL Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -43% from one quarter earlier. By comparison, 9 hedge funds held shares or bullish call options in GBL a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Murray Stahl's Horizon Asset Management has the largest position in Gamco Investors Inc. (NYSE:GBL), worth close to $6.1 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $1.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise Michael Price's MFP Investors, Mario Gabelli's GAMCO Investors and . In terms of the portfolio weights assigned to each position MFP Investors allocated the biggest weight to Gamco Investors Inc. (NYSE:GBL), around 0.14% of its 13F portfolio. Horizon Asset Management is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to GBL.
Judging by the fact that Gamco Investors Inc. (NYSE:GBL) has faced falling interest from the smart money, we can see that there is a sect of hedgies who were dropping their positions entirely heading into Q2. At the top of the heap, John H Lewis's Osmium Partners said goodbye to the biggest position of the "upper crust" of funds tracked by Insider Monkey, worth close to $3.1 million in stock, and David Harding's Winton Capital Management was right behind this move, as the fund dropped about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds heading into Q2.
Let's now review hedge fund activity in other stocks similar to Gamco Investors Inc. (NYSE:GBL). These stocks are Fathom Holdings Inc. (NASDAQ:FTHM), Selecta Biosciences, Inc. (NASDAQ:SELB), Oppenheimer Holdings Inc. (NYSE:OPY), XBiotech Inc. (NASDAQ:XBIT), Arlo Technologies, Inc. (NYSE:ARLO), The First of Long Island Corporation (NASDAQ:FLIC), and Boqii Holding Limited (NYSE:BQ). This group of stocks' market valuations match GBL's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FTHM,6,18214,1 SELB,15,52478,-1 OPY,10,26577,0 XBIT,6,2859,3 ARLO,18,38086,1 FLIC,8,29358,-1 BQ,2,5586,1 Average,9.3,24737,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.3 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $10 million in GBL's case. Arlo Technologies, Inc. (NYSE:ARLO) is the most popular stock in this table. On the other hand Boqii Holding Limited (NYSE:BQ) is the least popular one with only 2 bullish hedge fund positions. Gamco Investors Inc. (NYSE:GBL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GBL is 19.2. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on GBL as the stock returned 41.2% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.