The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Banco Santander (Brasil) SA (NYSE:BSBR).
Banco Santander (Brasil) SA (NYSE:BSBR) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 15. BSBR shareholders have witnessed a decrease in hedge fund sentiment in recent months. There were 10 hedge funds in our database with BSBR positions at the end of the second quarter. Our calculations also showed that BSBR 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
Donald Sussman of Paloma Partners
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. Keeping this in mind we’re going to check out the fresh hedge fund action regarding Banco Santander (Brasil) SA (NYSE:BSBR).
What have hedge funds been doing with Banco Santander (Brasil) SA (NYSE:BSBR)?
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -50% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BSBR over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Arrowstreet Capital held the most valuable stake in Banco Santander (Brasil) SA (NYSE:BSBR), which was worth $5.3 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $2 million worth of shares. Millennium Management, AQR Capital Management, and Two Sigma Advisors 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 Arrowstreet Capital allocated the biggest weight to Banco Santander (Brasil) SA (NYSE:BSBR), around 0.01% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, earmarking 0.0021 percent of its 13F equity portfolio to BSBR.
Because Banco Santander (Brasil) SA (NYSE:BSBR) has witnessed falling interest from the smart money, it’s easy to see that there was a specific group of hedge funds who were dropping their full holdings heading into Q4. It’s worth mentioning that Ken Griffin’s Citadel Investment Group cut the biggest position of the “upper crust” of funds monitored by Insider Monkey, comprising close to $1.9 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund dumped about $0.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 5 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to Banco Santander (Brasil) SA (NYSE:BSBR). These stocks are L3Harris Technologies, Inc. (NASDAQ:LHX), The Kraft Heinz Company (NASDAQ:KHC), Constellation Brands, Inc. (NYSE:STZ), eBay Inc (NASDAQ:EBAY), Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC), Xcel Energy Inc (NYSE:XEL), and The Blackstone Group Inc. (NYSE:BX). This group of stocks’ market values are similar to BSBR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LHX | 42 | 1149064 | -8 |
| KHC | 39 | 10114221 | 4 |
| STZ | 53 | 2196149 | 0 |
| EBAY | 50 | 4887490 | -8 |
| ERIC | 23 | 302159 | 0 |
| XEL | 22 | 355752 | -1 |
| BX | 49 | 1296447 | 2 |
| Average | 39.7 | 2900183 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.7 hedge funds with bullish positions and the average amount invested in these stocks was $2900 million. That figure was $10 million in BSBR’s case. Constellation Brands, Inc. (NYSE:STZ) is the most popular stock in this table. On the other hand Xcel Energy Inc (NYSE:XEL) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Banco Santander (Brasil) SA (NYSE:BSBR) is even less popular than XEL. Our overall hedge fund sentiment score for BSBR is 10. 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. Hedge funds clearly dropped the ball on BSBR as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on BSBR as the stock returned 54% since Q3 (through November 27th) and outperformed the market by an even larger margin.
Follow Banco Santander Brasil S A (NYSE:BSBR)
Follow Banco Santander Brasil S A (NYSE:BSBR)
Disclosure: None. This article was originally published at Insider Monkey.
