B&G Foods, Inc. (BGS): Hedge Funds In Wait-and-See Mode

At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not B&G Foods, Inc. (NYSE:BGS) makes for a good investment right now.

Hedge fund interest in B&G Foods, Inc. (NYSE:BGS) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BGS isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), Realogy Holdings Corp (NYSE:RLGY), and Revance Therapeutics Inc (NASDAQ:RVNC) to gather more data points.

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Daniel Och, Founder of OZ Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to take a peek at the fresh hedge fund action surrounding B&G Foods, Inc. (NYSE:BGS).

Do Hedge Funds Think BGS Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2020. On the other hand, there were a total of 13 hedge funds with a bullish position in BGS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, PEAK6 Capital Management was the largest shareholder of B&G Foods, Inc. (NYSE:BGS), with a stake worth $15.6 million reported as of the end of June. Trailing PEAK6 Capital Management was Citadel Investment Group, which amassed a stake valued at $7 million. OZ Management, Prelude Capital (previously Springbok Capital), and CaaS Capital 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 Factorial Partners allocated the biggest weight to B&G Foods, Inc. (NYSE:BGS), around 0.6% of its 13F portfolio. Algert Global is also relatively very bullish on the stock, earmarking 0.23 percent of its 13F equity portfolio to BGS.

Since B&G Foods, Inc. (NYSE:BGS) has experienced bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of money managers that elected to cut their full holdings heading into Q3. At the top of the heap, Steven Boyd’s Armistice Capital dropped the largest position of the “upper crust” of funds followed by Insider Monkey, worth about $8.9 million in stock. Lee Ainslie’s fund, Maverick Capital, also cut its stock, about $1.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to B&G Foods, Inc. (NYSE:BGS). We will take a look at Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), Realogy Holdings Corp (NYSE:RLGY), Revance Therapeutics Inc (NASDAQ:RVNC), Rush Enterprises, Inc. (NASDAQ:RUSHB), Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY), Nano Dimension Ltd. (NASDAQ:NNDM), and Zuora, Inc. (NYSE:ZUO). All of these stocks’ market caps match BGS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $229 million. That figure was $10 million in BGS’s case. Zuora, Inc. (NYSE:ZUO) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 5 bullish hedge fund positions. B&G Foods, Inc. (NYSE:BGS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BGS is 31.4. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately BGS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BGS investors were disappointed as the stock returned -6.1% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.

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