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Hedge Funds Have Never Been Less Bullish On Gulfport Energy Corporation (GPOR)

Nina Todic

Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren't very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. This year hedge funds' top 20 stock picks easily bested the broader market, at 24.4% compared to 20.4%, despite there being a few duds in there like Berkshire Hathaway (even their collective wisdom isn't perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.

Is Gulfport Energy Corporation (NASDAQ:GPOR) going to take off soon? The smart money is becoming less hopeful. The number of bullish hedge fund positions retreated by 6 recently. Our calculations also showed that GPOR isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds
5 Most Popular Stocks Among Hedge Funds

In the eyes of most shareholders, hedge funds are viewed as worthless, old financial vehicles of the past. While there are greater than 8000 funds trading today, Our experts choose to focus on the top tier of this club, around 750 funds. It is estimated that this group of investors orchestrate bulk of all hedge funds' total asset base, and by tracking their matchless stock picks, Insider Monkey has unearthed a few investment strategies that have historically outperformed the broader indices. Insider Monkey's flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

Izzy Englander of MILLENNIUM MANAGEMENT
Izzy Englander of MILLENNIUM MANAGEMENT

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to go over the fresh hedge fund action surrounding Gulfport Energy Corporation (NASDAQ:GPOR).

Hedge fund activity in Gulfport Energy Corporation (NASDAQ:GPOR)

Heading into the third quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -26% from the first quarter of 2019. By comparison, 17 hedge funds held shares or bullish call options in GPOR 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.

No of Hedge Funds with GPOR Positions
No of Hedge Funds with GPOR Positions

More specifically, Firefly Value Partners was the largest shareholder of Gulfport Energy Corporation (NASDAQ:GPOR), with a stake worth $56.2 million reported as of the end of March. Trailing Firefly Value Partners was Citadel Investment Group, which amassed a stake valued at $14.7 million. Firefly Value Partners, D E Shaw, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.

Seeing as Gulfport Energy Corporation (NASDAQ:GPOR) has experienced falling interest from hedge fund managers, it's safe to say that there were a few hedgies that elected to cut their positions entirely in the second quarter. Interestingly, David Harding's Winton Capital Management cut the biggest position of the "upper crust" of funds followed by Insider Monkey, valued at about $8.2 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund said goodbye to about $4.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 6 funds in the second quarter.

Let's go over hedge fund activity in other stocks similar to Gulfport Energy Corporation (NASDAQ:GPOR). We will take a look at P.H. Glatfelter Company (NYSE:GLT), e.l.f. Beauty, Inc. (NYSE:ELF), AK Steel Holding Corporation (NYSE:AKS), and Diebold Nixdorf Incorporated (NYSE:DBD). All of these stocks' market caps are closest to GPOR's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLT,6,16606,-4 ELF,18,198724,0 AKS,14,25987,1 DBD,15,128905,-3 Average,13.25,92556,-1.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $106 million in GPOR's case. e.l.f. Beauty, Inc. (NYSE:ELF) is the most popular stock in this table. On the other hand P.H. Glatfelter Company (NYSE:GLT) is the least popular one with only 6 bullish hedge fund positions. Gulfport Energy Corporation (NASDAQ:GPOR) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately GPOR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on GPOR were disappointed as the stock returned -44.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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

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