How do we determine whether Brookdale Senior Living, Inc. (NYSE:BKD) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Brookdale Senior Living, Inc. (NYSE:BKD) a bargain? Money managers are taking a bullish view. The number of long hedge fund bets moved up by 2 lately. BKD was in 66 hedge funds’ portfolios at the end of the third quarter of 2015. There were 64 hedge funds in our database with BKD positions at the end of the previous quarter. 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 Ingram Micro Inc. (NYSE:IM), First American Financial Corp (NYSE:FAF), and National Fuel Gas Co. (NYSE:NFG) to gather more data points.
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With all of this in mind, let’s check out the latest action encompassing Brookdale Senior Living, Inc. (NYSE:BKD).
Hedge fund activity in Brookdale Senior Living, Inc. (NYSE:BKD)
At the end of the third quarter, a total of 66 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the second quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Larry Robbins’ Glenview Capital has the most valuable position in Brookdale Senior Living, Inc. (NYSE:BKD), worth close to $405 million, amounting to 2% of its total 13F portfolio. Coming in second is Barry Rosenstein of JANA Partners, with a $235.6 million position; 2.7% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish include Martin Whitman’s Third Avenue Management, Matt Sirovich and Jeremy Mindich’s Scopia Capital and Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors.
As industrywide interest jumped, specific money managers were breaking ground themselves. Passport Capital, managed by John Burbank, created the most outsized position in Brookdale Senior Living, Inc. (NYSE:BKD). Passport Capital had $49.6 million invested in the company at the end of the quarter. Michael Blitzer’s Kingstown Capital Management also made a $34.4 million investment in the stock during the quarter. The following funds were also among the new BKD investors: Richard S. Meisenberg’s ACK Asset Management, Andrew Goldman’s Seven Locks Capital Management, and Thomas Ellis and Todd Hammer’s North Run Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Brookdale Senior Living, Inc. (NYSE:BKD) but similarly valued. These stocks are Ingram Micro Inc. (NYSE:IM), First American Financial Corp (NYSE:FAF), National Fuel Gas Co. (NYSE:NFG), and Western Refining, Inc. (NYSE:WNR). All of these stocks’ market caps match BKD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IM | 31 | 714718 | -5 |
| FAF | 20 | 392949 | 9 |
| NFG | 22 | 455990 | 11 |
| WNR | 30 | 471812 | 5 |
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $509 million. That figure was $2170 million in BKD’s case. Ingram Micro Inc. (NYSE:IM) is the most popular stock in this table. On the other hand First American Financial Corp (NYSE:FAF) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Brookdale Senior Living, Inc. (NYSE:BKD) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
