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Hedge Funds Are Piling Into Chart Industries, Inc. (GTLS)

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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 at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th. In this article we look at what those investors think of Chart Industries, Inc. (NASDAQ:GTLS).

Is Chart Industries, Inc. (NASDAQ:GTLS) ready to rally soon? Investors who are in the know were becoming more confident. The number of long hedge fund positions moved up by 8 lately. Chart Industries, Inc. (NASDAQ:GTLS) was in 27 hedge funds' portfolios at the end of June. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GTLS isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 19 hedge funds in our database with GTLS positions at the end of the first quarter.

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 79 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.

Billionaire Mario Gabelli's top 10 Stock Picks
Billionaire Mario Gabelli's top 10 Stock Picks

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. Keeping this in mind let's analyze the recent hedge fund action regarding Chart Industries, Inc. (NASDAQ:GTLS).

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

At the end of the second quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 42% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in GTLS over the last 24 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is GTLS A Good Stock To Buy?
Is GTLS A Good Stock To Buy?

The largest stake in Chart Industries, Inc. (NASDAQ:GTLS) was held by Fisher Asset Management, which reported holding $150.8 million worth of stock at the end of June. It was followed by Driehaus Capital with a $42 million position. Other investors bullish on the company included Millennium Management, GAMCO Investors, and Intrinsic Edge Capital. In terms of the portfolio weights assigned to each position Bourgeon Capital allocated the biggest weight to Chart Industries, Inc. (NASDAQ:GTLS), around 2.33% of its 13F portfolio. Brasada Capital Management is also relatively very bullish on the stock, setting aside 1.56 percent of its 13F equity portfolio to GTLS.

Now, specific money managers were breaking ground themselves. Brant Point Investment Management, managed by Ira Unschuld, created the most valuable call position in Chart Industries, Inc. (NASDAQ:GTLS). Brant Point Investment Management had $7.3 million invested in the company at the end of the quarter. Andrew Dalrymple and Barry McCorkell's Aubrey Capital Management also made a $4.1 million investment in the stock during the quarter. The other funds with brand new GTLS positions are Louis Bacon's Moore Global Investments, Steve Cohen's Point72 Asset Management, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.

Let's now review hedge fund activity in other stocks similar to Chart Industries, Inc. (NASDAQ:GTLS). These stocks are JetBlue Airways Corporation (NASDAQ:JBLU), Inovalon Holdings Inc (NASDAQ:INOV), Ashland Global Holdings Inc.. (NYSE:ASH), Enstar Group Ltd. (NASDAQ:ESGR), QTS Realty Trust Inc (NYSE:QTS), Gates Industrial Corporation plc (NYSE:GTES), and Glacier Bancorp, Inc. (NASDAQ:GBCI). All of these stocks' market caps are closest to GTLS's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JBLU,30,401724,1 INOV,20,145599,3 ASH,28,933462,-8 ESGR,11,495727,0 QTS,39,1285562,17 GTES,19,89195,1 GBCI,11,51205,-5 Average,22.6,486068,1.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.6 hedge funds with bullish positions and the average amount invested in these stocks was $486 million. That figure was $327 million in GTLS's case. QTS Realty Trust Inc (NYSE:QTS) is the most popular stock in this table. On the other hand Enstar Group Ltd. (NASDAQ:ESGR) is the least popular one with only 11 bullish hedge fund positions. Chart Industries, Inc. (NASDAQ:GTLS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GTLS is 68.6. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on GTLS as the stock returned 24.1% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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