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 821 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 March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Gran Tierra Energy Inc. (NYSE:GTE) and determine whether the smart money was really smart about this stock.
Gran Tierra Energy Inc. (NYSE:GTE) was in 12 hedge funds' portfolios at the end of March. GTE has seen a decrease in hedge fund sentiment lately. There were 15 hedge funds in our database with GTE holdings at the end of the previous quarter. Our calculations also showed that GTE 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.
According to most traders, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds in operation at present, Our researchers hone in on the crème de la crème of this club, approximately 850 funds. These investment experts handle bulk of the smart money's total capital, and by watching their unrivaled picks, Insider Monkey has spotted several investment strategies that have historically defeated the broader indices. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually 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_728376" align="aligncenter" width="393"] Jonathan Barrett of Luminus Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. 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. With all of this in mind let's take a look at the fresh hedge fund action surrounding Gran Tierra Energy Inc. (NYSE:GTE).
What does smart money think about Gran Tierra Energy Inc. (NYSE:GTE)?
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in GTE over the last 18 quarters. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Thomas E. Claugus's GMT Capital has the largest position in Gran Tierra Energy Inc. (NYSE:GTE), worth close to $21.3 million, comprising 1.2% of its total 13F portfolio. On GMT Capital's heels is Luminus Management, led by Jonathan Barrett and Paul Segal, holding a $3.6 million position; 0.4% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Amit Wadhwaney's Moerus Capital Management, Renaissance Technologies and Phill Gross and Robert Atchinson's Adage Capital Management. In terms of the portfolio weights assigned to each position Moerus Capital Management allocated the biggest weight to Gran Tierra Energy Inc. (NYSE:GTE), around 1.48% of its 13F portfolio. GMT Capital is also relatively very bullish on the stock, setting aside 1.2 percent of its 13F equity portfolio to GTE.
Because Gran Tierra Energy Inc. (NYSE:GTE) has witnessed falling interest from the smart money, we can see that there were a few fund managers that decided to sell off their positions entirely heading into Q4. At the top of the heap, Bradley Louis Radoff's Fondren Management said goodbye to the largest position of the "upper crust" of funds monitored by Insider Monkey, comprising about $0.5 million in stock. Michael Gelband's fund, ExodusPoint Capital, also sold off its stock, about $0.4 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds heading into Q4.
Let's check out hedge fund activity in other stocks similar to Gran Tierra Energy Inc. (NYSE:GTE). These stocks are LiveXLive Media, Inc. (NASDAQ:LIVX), RYB Education, Inc. (NYSE:RYB), Chembio Diagnostics Inc (NASDAQ:CEMI), and Waitr Holdings Inc. (NASDAQ:WTRH). This group of stocks' market valuations resemble GTE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LIVX,3,5130,0 RYB,3,6156,-1 CEMI,4,13772,1 WTRH,7,7128,-1 Average,4.25,8047,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $32 million in GTE's case. Waitr Holdings Inc. (NASDAQ:WTRH) is the most popular stock in this table. On the other hand LiveXLive Media, Inc. (NASDAQ:LIVX) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Gran Tierra Energy Inc. (NYSE:GTE) is more popular among hedge funds. 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 returned 12.3% in 2020 through June 30th but still managed to beat the market by 15.5 percentage points. Hedge funds were also right about betting on GTE as the stock returned 40% in Q2 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.