With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was Bright Horizons Family Solutions Inc (NYSE:BFAM).
Bright Horizons Family Solutions Inc (NYSE:BFAM) has experienced an increase in hedge fund interest of late. Bright Horizons Family Solutions Inc (NYSE:BFAM) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 34. Our calculations also showed that BFAM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s view the recent hedge fund action regarding Bright Horizons Family Solutions Inc (NYSE:BFAM).
Do Hedge Funds Think BFAM Is A Good Stock To Buy Now?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 24% from one quarter earlier. On the other hand, there were a total of 26 hedge funds with a bullish position in BFAM a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Osterweis Capital Management was the largest shareholder of Bright Horizons Family Solutions Inc (NYSE:BFAM), with a stake worth $17.8 million reported as of the end of September. Trailing Osterweis Capital Management was Laurion Capital Management, which amassed a stake valued at $17.1 million. Bridgewater Associates, CaaS Capital, and GLG Partners 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 Lee Capital Management allocated the biggest weight to Bright Horizons Family Solutions Inc (NYSE:BFAM), around 1.1% of its 13F portfolio. Osterweis Capital Management is also relatively very bullish on the stock, dishing out 0.97 percent of its 13F equity portfolio to BFAM.
As industrywide interest jumped, key hedge funds have jumped into Bright Horizons Family Solutions Inc (NYSE:BFAM) headfirst. Laurion Capital Management, managed by Benjamin A. Smith, established the most outsized position in Bright Horizons Family Solutions Inc (NYSE:BFAM). Laurion Capital Management had $17.1 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $3.7 million position during the quarter. The following funds were also among the new BFAM investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Qing Li’s Sciencast Management, and Greg Poole’s Echo Street Capital Management.
Let’s go over hedge fund activity in other stocks similar to Bright Horizons Family Solutions Inc (NYSE:BFAM). We will take a look at Gerdau SA (NYSE:GGB), Aramark (NYSE:ARMK), MKS Instruments, Inc. (NASDAQ:MKSI), SEI Investments Company (NASDAQ:SEIC), DigitalOcean Holdings, Inc. (NYSE:DOCN), BanColombia S.A. (NYSE:CIB), and Mobile TeleSystems OJSC (NYSE:MBT). This group of stocks’ market caps are similar to BFAM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GGB | 13 | 220161 | -4 |
| ARMK | 29 | 1149672 | -7 |
| MKSI | 28 | 425306 | 2 |
| SEIC | 26 | 329914 | 2 |
| DOCN | 27 | 758449 | 11 |
| CIB | 3 | 87716 | 0 |
| MBT | 6 | 236823 | -4 |
| Average | 18.9 | 458292 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.9 hedge funds with bullish positions and the average amount invested in these stocks was $458 million. That figure was $97 million in BFAM’s case. Aramark (NYSE:ARMK) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 3 bullish hedge fund positions. Bright Horizons Family Solutions Inc (NYSE:BFAM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BFAM is 62.1. 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 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately BFAM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BFAM were disappointed as the stock returned -9.7% since the end of September (through 12/31) 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 many of these stocks already outperformed the market since 2019.
Follow Bright Horizons Family Solutions Inc. (NYSE:BFAM)
Follow Bright Horizons Family Solutions Inc. (NYSE:BFAM)
Suggested Articles:
- 11 Best Lithium Stocks To Buy Now
- 15 Largest Beer Companies In The World
- 15 Best E-Commerce Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
