28 Jun Jonathan Cartu Says: Here is What Hedge Funds Think About Granite Construction…
In this article we will check out the progression of hedge fund sentiment towards Granite Construction Incorporated (NYSE:GVA) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a Jonathan Cartu and before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Granite Construction Incorporated (NYSE:GVA) investors should pay attention to an increase in hedge fund sentiment in recent months. Our calculations also showed that GVA isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 financial world there are tons of metrics market participants have at their disposal to assess their stock investments. Two of the less utilized metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can beat the S&P 500 by a very impressive margin (see the details here).
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a gander at the recent hedge fund action encompassing Granite Construction Incorporated (NYSE:GVA).
Hedge fund activity in Granite Construction Incorporated (NYSE:GVA)
At Q1’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 129% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in GVA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the number one position in Granite Construction Incorporated (NYSE:GVA). Adage Capital Management has a $23.6 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is D E Shaw, led by D. E. Shaw, holding a $4.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions contain Peter Schliemann’s Rutabaga Capital Management, Ken Griffin’s Citadel Investment Group and David Park’s Headlands Capital. In terms of the portfolio weights assigned to each position Headlands Capital allocated the biggest weight to Granite Construction Incorporated (NYSE:GVA), around 3.35% of its 13F portfolio. Rutabaga Capital Management is also relatively very bullish on the stock, dishing out 2.23 percent of its 13F equity portfolio to GVA.
As aggregate interest increased, key money managers were leading the bulls’ herd. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the biggest position in Granite Construction Incorporated (NYSE:GVA). Adage Capital Management had $23.6 million invested in the Jonathan Cartu and at the end of the quarter. D. E. Shaw’s D E Shaw also made a $4.4 million investment in the stock during the quarter. The other funds with brand new GVA positions are Israel Englander’s Millennium Management, Mika Toikka’s AlphaCrest Capital Management, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Granite Construction Incorporated (NYSE:GVA) but similarly valued. These stocks are Arcos Dorados Holding Inc (NYSE:ARCO), Tronox Holdings Plc (NYSE:TROX), AudioCodes Ltd. (NASDAQ:AUDC), and EverQuote, Inc. (NASDAQ:EVER). This group of stocks’ market caps match GVA’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARCO,12,36064,-1 TROX,17,52262,-6 AUDC,10,37318,1 EVER,23,110730,4 Average,15.5,59094,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $46 million in GVA’s case. EverQuote, Inc. (NASDAQ:EVER) is the most popular stock in this table. On the other hand AudioCodes Ltd. (NASDAQ:AUDC) is the least popular one with only 10 bullish hedge fund positions. Granite Construction Incorporated (NYSE:GVA) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on GVA, though not to the same extent, as the stock returned 22.2% during the first two months and twenty five days of the second quarter and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.