This Metric Says You Are Smart to Buy GNC Holdings Inc (GNC)

Is GNC Holdings Inc (NYSE:GNC) a good stock to buy now? Prominent investors are betting on the stock. The number of bullish hedge fund positions moved up by two lately.

Mention something original about this stock in the first paragraph. It could be about some recent news, a regulatory filing, etc. (just quickly search Yahoo Finance to find what is going on with this stock)

GNC Holdings Inc (NYSE:GNC)

In late November, GNC Holdings, Inc. (NYSE: GNC) announced its Board of Directors has authorized a multi-year program to repurchase up to an aggregate $500 million of the Company’s Class A common stock, according to a press release.

With these “truths” under our belt, it’s important to take a glance at the recent action regarding GNC Holdings Inc (NYSE:GNC).

Hedge fund activity in GNC Holdings Inc (NYSE:GNC)

Heading into Q4, a total of 34 of the hedge funds we track were long in this stock, a change of 6 pecent from the second quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies followed by Insider Monkey, SAC Capital Advisors, managed by Steven Cohen, holds the largest position in GNC Holdings Inc (NYSE:GNC). SAC Capital Advisors has a $147.1 million position in the stock, comprising 0.8 percent of its 13F portfolio. The second largest stake is held by Alexander Mitchell of Scopus Asset Management, with a $96.4 million position; the fund has 2.4 percent of its 13F portfolio invested in the stock. Some other hedgies that hold long positions contain Dinakar Singh’s TPG-AXON Management LP, D. E. Shaw’s D E Shaw and SAC Subsidiary’s Sigma Capital Management.

As aggregate interest increased, key hedge funds were breaking ground themselves. Ascend Capital, managed by Malcolm Fairbairn, created the most valuable position in GNC Holdings Inc (NYSE:GNC). Ascend Capital had 15.5 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also initiated a $10.1 million position during the quarter. The following funds were also among the new GNC investors: Leon Shaulov’s Maplelane Capital, John Croghan and Richard Fradin’s Rail-Splitter Capital Management, and Robert Raiff’s Raiff Partners.

Insider trading activity in GNC Holdings Inc (NYSE:GNC)

Insider trading activity, especially when it’s bullish, is best served when the company in focus has experienced transactions within the past six months. Over the latest 180-day time period, GNC Holdings Inc (NYSE:GNC) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to GNC Holdings Inc (NYSE:GNC). These stocks are CVS Caremark Corporation (NYSE:CVS), Walgreen Company (NYSE:WAG), PharMerica Corporation (NYSE:PMC), BioScrip Inc. (NASDAQ:BIOS), and Rite Aid Corporation (NYSE:RAD). This group of stocks are the members of the drug stores industry and their market caps are similar to GNC’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
CVS Caremark Corporation (NYSE:CVS) 48 0 6
Walgreen Company (NYSE:WAG) 56 2 1
PharMerica Corporation (NYSE:PMC) 12 0 2
BioScrip Inc. (NASDAQ:BIOS) 21 0 5
Rite Aid Corporation (NYSE:RAD) 37 2 10

GNC Holdings Inc is the third most widely held drug stores industry stock among the hedge funds Insider Monkey tracks.


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