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 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider GTT Communications Inc (NYSE:GTT) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
GTT Communications Inc (NYSE:GTT) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 18 hedge funds' portfolios at the end of June. At the end of this article we will also compare GTT to other stocks including NV5 Holdings Inc (NASDAQ:NVEE), Kelly Services, Inc. (NASDAQ:KELYA), and Endo International plc (NASDAQ:ENDP) to get a better sense of its popularity. Our calculations also showed that GTT 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.
If you'd ask most market participants, hedge funds are perceived as underperforming, outdated investment tools of the past. While there are more than 8000 funds in operation at the moment, Our researchers look at the leaders of this club, about 750 funds. Most estimates calculate that this group of people preside over the majority of the smart money's total asset base, and by observing their top stock picks, Insider Monkey has deciphered numerous investment strategies that have historically surpassed the S&P 500 index. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points a 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 .
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. Let's take a gander at the key hedge fund action encompassing GTT Communications Inc (NYSE:GTT).
What have hedge funds been doing with GTT Communications Inc (NYSE:GTT)?
At Q2's end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the first quarter of 2019. On the other hand, there were a total of 16 hedge funds with a bullish position in GTT a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Spruce House Investment Management held the most valuable stake in GTT Communications Inc (NYSE:GTT), which was worth $217.8 million at the end of the second quarter. On the second spot was Third Point which amassed $53.9 million worth of shares. Moreover, MFN Partners, Goodnow Investment Group, and Cove Street Capital were also bullish on GTT Communications Inc (NYSE:GTT), allocating a large percentage of their portfolios to this stock.
Since GTT Communications Inc (NYSE:GTT) has experienced declining sentiment from the smart money, it's easy to see that there were a few funds who sold off their entire stakes heading into Q3. Interestingly, Remy Trafelet's Trafelet Capital said goodbye to the biggest investment of the 750 funds monitored by Insider Monkey, totaling close to $5.7 million in stock. Jonathan Lourie and Stuart Fiertz's fund, Cheyne Capital, also said goodbye to its stock, about $2.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to GTT Communications Inc (NYSE:GTT). We will take a look at NV5 Holdings Inc (NASDAQ:NVEE), Kelly Services, Inc. (NASDAQ:KELYA), Endo International plc (NASDAQ:ENDP), and M/A-COM Technology Solutions Holdings (NASDAQ:MTSI). This group of stocks' market caps resemble GTT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NVEE,12,30332,2 KELYA,10,23858,-3 ENDP,21,252668,2 MTSI,17,176112,1 Average,15,120743,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $121 million. That figure was $345 million in GTT's case. Endo International plc (NASDAQ:ENDP) is the most popular stock in this table. On the other hand Kelly Services, Inc. (NASDAQ:KELYA) is the least popular one with only 10 bullish hedge fund positions. GTT Communications Inc (NYSE:GTT) 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 GTT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on GTT were disappointed as the stock returned -46.5% 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.