money Hedge Funds Are Dumping Glacier Bancorp, Inc. (GBCI)
We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Keeping this in mind, let's take a look at whether Glacier Bancorp, Inc. (NASDAQ:GBCI) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Glacier Bancorp, Inc. (NASDAQ:GBCI) ready to rally soon? Investors who are in the know are taking a pessimistic view. The number of bullish hedge fund bets were trimmed by 1 in recent months. Our calculations also showed that GBCI isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings). GBCI was in 13 hedge funds' portfolios at the end of the fourth quarter of 2019. There were 14 hedge funds in our database with GBCI holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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Dmitry Balyasny of Balyasny Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic's significance before most investors. With all of this in mind we're going to check out the latest hedge fund action regarding Glacier Bancorp, Inc. (NASDAQ:GBCI).
How are hedge funds trading Glacier Bancorp, Inc. (NASDAQ:GBCI)?
Heading into the first quarter of 2020, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in GBCI 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.
More specifically, Fisher Asset Management was the largest shareholder of Glacier Bancorp, Inc. (NASDAQ:GBCI), with a stake worth $27.9 million reported as of the end of September. Trailing Fisher Asset Management was Forest Hill Capital, which amassed a stake valued at $4.1 million. Balyasny Asset Management, Millennium Management, and GLG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Glacier Bancorp, Inc. (NASDAQ:GBCI), around 1.36% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to GBCI.
Due to the fact that Glacier Bancorp, Inc. (NASDAQ:GBCI) has experienced falling interest from hedge fund managers, it's easy to see that there were a few funds who were dropping their entire stakes by the end of the third quarter. At the top of the heap, D. E. Shaw's D E Shaw dropped the biggest investment of all the hedgies followed by Insider Monkey, comprising an estimated $0.3 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund dumped about $0.1 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds by the end of the third quarter.
Let's check out hedge fund activity in other stocks similar to Glacier Bancorp, Inc. (NASDAQ:GBCI). These stocks are Rayonier Inc. (NYSE:RYN), Tripadvisor Inc (NASDAQ:TRIP), Brighthouse Financial, Inc. (NASDAQ:BHF), and Echostar Corporation (NASDAQ:SATS). All of these stocks' market caps match GBCI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RYN,14,360071,-1 TRIP,39,794196,7 BHF,43,610609,14 SATS,26,641376,-6 Average,30.5,601563,3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.5 hedge funds with bullish positions and the average amount invested in these stocks was $602 million. That figure was $50 million in GBCI's case. Brighthouse Financial, Inc. (NASDAQ:BHF) is the most popular stock in this table. On the other hand Rayonier Inc. (NYSE:RYN) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Glacier Bancorp, Inc. (NASDAQ:GBCI) is even less popular than RYN. Hedge funds dodged a bullet by taking a bearish stance towards GBCI. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but managed to beat the market by 5.5 percentage points. Unfortunately GBCI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); GBCI investors were disappointed as the stock returned -29.9% during the same time period 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 most of these stocks already outperformed the market so far in Q1.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
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