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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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Goldman Sachs BDC, Inc. (NYSE:GSBD).
Is Goldman Sachs BDC, Inc. (NYSE:GSBD) undervalued? The smart money was in a bullish mood. The number of bullish hedge fund bets rose by 3 lately. Goldman Sachs BDC, Inc. (NYSE:GSBD) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GSBD isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are numerous methods market participants can use to value their stock investments. Some of the most under-the-radar methods are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top investment managers can trounce the market by a healthy amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. With all of this in mind we're going to go over the fresh hedge fund action encompassing Goldman Sachs BDC, Inc. (NYSE:GSBD).
Do Hedge Funds Think GSBD Is A Good Stock To Buy Now?
At first quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 150% from the fourth quarter of 2020. By comparison, 1 hedge funds held shares or bullish call options in GSBD a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in Goldman Sachs BDC, Inc. (NYSE:GSBD) was held by McKinley Capital Management, which reported holding $3 million worth of stock at the end of December. It was followed by Millennium Management with a $1.1 million position. Other investors bullish on the company included Prelude Capital (previously Springbok Capital), Schonfeld Strategic Advisors, and Paloma Partners. In terms of the portfolio weights assigned to each position McKinley Capital Management allocated the biggest weight to Goldman Sachs BDC, Inc. (NYSE:GSBD), around 0.22% of its 13F portfolio. Prelude Capital (previously Springbok Capital) is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to GSBD.
Consequently, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, established the most valuable position in Goldman Sachs BDC, Inc. (NYSE:GSBD). Millennium Management had $1.1 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital) also made a $0.6 million investment in the stock during the quarter. The other funds with brand new GSBD positions are Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors and Donald Sussman's Paloma Partners.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Goldman Sachs BDC, Inc. (NYSE:GSBD) but similarly valued. We will take a look at American Assets Trust, Inc (NYSE:AAT), Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY), InterDigital, Inc. (NASDAQ:IDCC), Service Properties Trust (NASDAQ:SVC), Infinera Corp. (NASDAQ:INFN), Apollo Commercial Real Est. Finance Inc (NYSE:ARI), and TechTarget Inc (NASDAQ:TTGT). All of these stocks' market caps match GSBD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AAT,12,19323,-2 SNCY,20,173113,20 IDCC,15,273221,-3 SVC,18,153253,-2 INFN,20,372720,-1 ARI,11,44247,-7 TTGT,17,129279,-1 Average,16.1,166451,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $166 million. That figure was $5 million in GSBD's case. Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY) is the most popular stock in this table. On the other hand Apollo Commercial Real Est. Finance Inc (NYSE:ARI) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Goldman Sachs BDC, Inc. (NYSE:GSBD) is even less popular than ARI. Our overall hedge fund sentiment score for GSBD is 38. 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. Hedge funds dodged a bullet by taking a bearish stance towards GSBD. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th but managed to beat the market again by 6.1 percentage points. Unfortunately GSBD wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); GSBD investors were disappointed as the stock returned 3.1% since the end of the first quarter (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.