The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Gulf Island Fabrication, Inc. (NASDAQ:GIFI) based on those filings.
Gulf Island Fabrication, Inc. (NASDAQ:GIFI) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds' portfolios at the end of March. Our calculations also showed that GIFI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Manhattan Bridge Capital, Inc (NASDAQ:LOAN), Village Bank and Trust Financial Corp. (NASDAQ:VBFC), and Nabriva Therapeutics plc (NASDAQ:NBRV) to gather more data points.
In the 21st century investor’s toolkit there are a large number of metrics stock market investors have at their disposal to evaluate publicly traded companies. A couple of the most innovative metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite fund managers can outclass the S&P 500 by a very impressive 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 .
John Rogers of Ariel Investments
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Do Hedge Funds Think GIFI Is A Good Stock To Buy Now?
At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2020. On the other hand, there were a total of 8 hedge funds with a bullish position in GIFI 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.
Among these funds, Renaissance Technologies held the most valuable stake in Gulf Island Fabrication, Inc. (NASDAQ:GIFI), which was worth $3.1 million at the end of the fourth quarter. On the second spot was Solas Capital Management which amassed $2.9 million worth of shares. Millennium Management, Factorial Partners, and Ariel Investments 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 Solas Capital Management allocated the biggest weight to Gulf Island Fabrication, Inc. (NASDAQ:GIFI), around 2.44% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to GIFI.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Gulf Island Fabrication, Inc. (NASDAQ:GIFI) but similarly valued. We will take a look at Manhattan Bridge Capital, Inc (NASDAQ:LOAN), Village Bank and Trust Financial Corp. (NASDAQ:VBFC), Nabriva Therapeutics plc (NASDAQ:NBRV), Aehr Test Systems (NASDAQ:AEHR), The LGL Group, Inc. (NYSE:LGL), Rezolute, Inc. (NASDAQ:RZLT), and Predictive Oncology Inc. (NASDAQ:POAI). This group of stocks' market values are similar to GIFI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LOAN,1,972,0 VBFC,1,968,0 NBRV,4,1339,-1 AEHR,1,2641,-3 LGL,3,9596,0 RZLT,5,5909,1 POAI,2,3200,2 Average,2.4,3518,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.4 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $7 million in GIFI's case. Rezolute, Inc. (NASDAQ:RZLT) is the most popular stock in this table. On the other hand Manhattan Bridge Capital, Inc (NASDAQ:LOAN) is the least popular one with only 1 bullish hedge fund positions. Gulf Island Fabrication, Inc. (NASDAQ:GIFI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GIFI is 66.5. 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. 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 still beat the market by 6.1 percentage points. Hedge funds were also right about betting on GIFI as the stock returned 16.1% since the end of Q1 (through 6/18) 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.