Do Hedge Funds Love GSI Technology, Inc. (GSIT)?
The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards GSI Technology, Inc. (NASDAQ:GSIT).
Is GSI Technology, Inc. (NASDAQ:GSIT) a good investment right now? Money managers were betting on the stock. The number of long hedge fund bets rose by 1 recently. GSI Technology, Inc. (NASDAQ:GSIT) was in 5 hedge funds' portfolios at the end of March. The all time high for this statistic is 8. Our calculations also showed that GSIT isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 4 hedge funds in our database with GSIT holdings at the end of December.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
John Rogers of Ariel Investments
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. Now we're going to take a gander at the recent hedge fund action encompassing GSI Technology, Inc. (NASDAQ:GSIT).
Do Hedge Funds Think GSIT Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from one quarter earlier. By comparison, 6 hedge funds held shares or bullish call options in GSIT a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Roumell Asset Management was the largest shareholder of GSI Technology, Inc. (NASDAQ:GSIT), with a stake worth $9.6 million reported as of the end of March. Trailing Roumell Asset Management was Renaissance Technologies, which amassed a stake valued at $6.3 million. Ariel Investments, Citadel Investment Group, and Algert Global 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 Roumell Asset Management allocated the biggest weight to GSI Technology, Inc. (NASDAQ:GSIT), around 13.82% of its 13F portfolio. Algert Global is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to GSIT.
As one would reasonably expect, specific money managers have jumped into GSI Technology, Inc. (NASDAQ:GSIT) headfirst. Citadel Investment Group, managed by Ken Griffin, created the most outsized position in GSI Technology, Inc. (NASDAQ:GSIT). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter. Peter Algert's Algert Global also made a $0.1 million investment in the stock during the quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as GSI Technology, Inc. (NASDAQ:GSIT) but similarly valued. These stocks are OP Bancorp (NASDAQ:OPBK), Catalyst Biosciences Inc (NASDAQ:CBIO), Grupo Supervielle S.A. (NYSE:SUPV), Synchronoss Technologies, Inc. (NASDAQ:SNCR), 180 Life Sciences Corp. (NASDAQ:ATNF), PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), and MainStreet Bancshares, Inc. (NASDAQ:MNSB). This group of stocks' market valuations are similar to GSIT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OPBK,6,12290,2 CBIO,16,65034,1 SUPV,2,120,-3 SNCR,9,8448,-1 ATNF,4,1519,-1 PHAS,7,27505,0 MNSB,2,9781,-1 Average,6.6,17814,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $18 million in GSIT's case. Catalyst Biosciences Inc (NASDAQ:CBIO) is the most popular stock in this table. On the other hand Grupo Supervielle S.A. (NYSE:SUPV) is the least popular one with only 2 bullish hedge fund positions. GSI Technology, Inc. (NASDAQ:GSIT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GSIT is 35.5. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately GSIT wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GSIT investors were disappointed as the stock returned -19.1% since the end of March (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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
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