Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of GoPro Inc (NASDAQ:GPRO).
GoPro Inc (NASDAQ:GPRO) was in 9 hedge funds' portfolios at the end of March. GPRO shareholders have witnessed a decrease in support from the world's most elite money managers in recent months. There were 10 hedge funds in our database with GPRO holdings at the end of the previous quarter. Our calculations also showed that GPRO 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.
If you'd ask most shareholders, hedge funds are seen as slow, outdated financial tools of the past. While there are over 8000 funds trading at present, Our researchers choose to focus on the crème de la crème of this club, approximately 850 funds. It is estimated that this group of investors watch over the majority of all hedge funds' total asset base, and by monitoring their finest investments, Insider Monkey has determined a number of investment strategies that have historically outstripped Mr. Market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum 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_256989" align="aligncenter" width="400"] Dmitry Balyasny of Balyasny Asset Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the top 15 defense contractors in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. 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. Now let's check out the key hedge fund action surrounding GoPro Inc (NASDAQ:GPRO).
What does smart money think about GoPro Inc (NASDAQ:GPRO)?
At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in GPRO a year ago. So, let's see 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, Lynrock Lake, managed by Cynthia Paul, holds the most valuable position in GoPro Inc (NASDAQ:GPRO). Lynrock Lake has a $148.9 million position in the stock, comprising 14.7% of its 13F portfolio. The second largest stake is held by Prentice Capital Management, led by Michael Zimmerman, holding a $33.2 million position; 15.8% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions consist of D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Peter Muller's PDT Partners. In terms of the portfolio weights assigned to each position Prentice Capital Management allocated the biggest weight to GoPro Inc (NASDAQ:GPRO), around 15.76% of its 13F portfolio. Lynrock Lake is also relatively very bullish on the stock, setting aside 14.67 percent of its 13F equity portfolio to GPRO.
Because GoPro Inc (NASDAQ:GPRO) has faced a decline in interest from the smart money, we can see that there were a few money managers who sold off their positions entirely heading into Q4. Intriguingly, Kenneth Tropin's Graham Capital Management sold off the largest stake of the "upper crust" of funds tracked by Insider Monkey, worth an estimated $15.6 million in stock. Renaissance Technologies, also cut its stock, about $9.5 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q4.
Let's go over hedge fund activity in other stocks similar to GoPro Inc (NASDAQ:GPRO). These stocks are Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), Bank of Marin Bancorp (NASDAQ:BMRC), and Banc of California, Inc. (NASDAQ:BANC). This group of stocks' market values resemble GPRO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BLX,3,30130,0 AXL,22,44333,-1 BMRC,6,13433,0 BANC,10,32635,-4 Average,10.25,30133,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $199 million in GPRO's case. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX) is the least popular one with only 3 bullish hedge fund positions. GoPro Inc (NASDAQ:GPRO) 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 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on GPRO as the stock returned 79.2% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.