Is GSMG A Good Stock To Buy Now?
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Glory Star New Media Group Holdings Limited (NASDAQ:GSMG).
Is GSMG a good stock to buy now? The best stock pickers were buying. The number of long hedge fund bets moved up by 2 recently. Glory Star New Media Group Holdings Limited (NASDAQ:GSMG) was in 9 hedge funds’ portfolios at the end of September. The all time high for this statistics is 11. Our calculations also showed that GSMG isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
In the 21st century investor’s toolkit there are numerous methods shareholders put to use to value their holdings. A couple of the most under-the-radar methods are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce their index-focused peers by a significant margin (see the details here).
Bart Baum of Ionic Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind we’re going to go over the new hedge fund action regarding Glory Star New Media Group Holdings Limited (NASDAQ:GSMG).
Do Hedge Funds Think GSMG Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the previous quarter. By comparison, 9 hedge funds held shares or bullish call options in GSMG a year ago. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Glory Star New Media Group Holdings Limited (NASDAQ:GSMG), with a stake worth $1.1 million reported as of the end of September. Trailing Millennium Management was BlueCrest Capital Mgmt., which amassed a stake valued at $0.3 million. Owl Creek Asset Management, Hudson Bay Capital Management, and Ionic Capital Management 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 BlueCrest Capital Mgmt. allocated the biggest weight to Glory Star New Media Group Holdings Limited (NASDAQ:GSMG), around 0.01% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to GSMG.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Bulldog Investors, managed by Phillip Goldstein, Andrew Dakos and Steven Samuels, created the most valuable position in Glory Star New Media Group Holdings Limited (NASDAQ:GSMG). Bulldog Investors had $0 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Glory Star New Media Group Holdings Limited (NASDAQ:GSMG) but similarly valued. These stocks are Gencor Industries, Inc. (NASDAQ:GENC), Five Star Senior Living Inc. (NASDAQ:FVE), Timkensteel Corp (NYSE:TMST), Electrameccanica Vehicles Corp. (NASDAQ:SOLO), Weyco Group, Inc. (NASDAQ:WEYS), Aptinyx Inc. (NASDAQ:APTX), and Premier Financial Bancorp, Inc. (NASDAQ:PFBI). This group of stocks’ market valuations are similar to GSMG’s market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GENC,4,22378,0 FVE,6,23959,1 TMST,12,9445,0 SOLO,3,1006,0 WEYS,3,3042,-1 APTX,7,36093,-1 PFBI,4,3181,2 Average,5.6,14158,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.6 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $1 million in GSMG’s case. Timkensteel Corp (NYSE:TMST) is the most popular stock in this table. On the other hand Electrameccanica Vehicles Corp. (NASDAQ:SOLO) is the least popular one with only 3 bullish hedge fund positions. Glory Star New Media Group Holdings Limited (NASDAQ:GSMG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GSMG is 64.9. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and beat the market again by 16.2 percentage points. Unfortunately GSMG wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GSMG were disappointed as the stock returned 1.1% since the end of September (through 12/8) 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 many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.