We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards JetBlue Airways Corporation (NASDAQ:JBLU) and determine whether hedge funds skillfully traded this stock.
JetBlue Airways Corporation (NASDAQ:JBLU) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. JBLU has seen an increase in hedge fund sentiment lately. There were 30 hedge funds in our database with JBLU positions at the end of the second quarter. Our calculations also showed that JBLU isn’t among the 30 most popular stocks among hedge funds (click for Q3 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. Keeping this in mind let’s view the key hedge fund action surrounding JetBlue Airways Corporation (NASDAQ:JBLU).
Paul Reeder of PAR Capital Management
Do Hedge Funds Think JBLU Is A Good Stock To Buy Now?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the second quarter of 2021. On the other hand, there were a total of 23 hedge funds with a bullish position in JBLU 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.
The largest stake in JetBlue Airways Corporation (NASDAQ:JBLU) was held by Millennium Management, which reported holding $48.9 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $43.6 million position. Other investors bullish on the company included PAR Capital Management, Balyasny Asset Management, and Prentice Capital Management. In terms of the portfolio weights assigned to each position Prentice Capital Management allocated the biggest weight to JetBlue Airways Corporation (NASDAQ:JBLU), around 6.35% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, setting aside 4.47 percent of its 13F equity portfolio to JBLU.
As industrywide interest jumped, key hedge funds have jumped into JetBlue Airways Corporation (NASDAQ:JBLU) headfirst. Jade Capital Advisors, managed by Robert Vincent McHugh, initiated the most outsized position in JetBlue Airways Corporation (NASDAQ:JBLU). Jade Capital Advisors had $7.6 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $5.6 million investment in the stock during the quarter. The following funds were also among the new JBLU investors: John Overdeck and David Siegel’s Two Sigma Advisors, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Qing Li’s Sciencast Management.
Let’s now review hedge fund activity in other stocks similar to JetBlue Airways Corporation (NASDAQ:JBLU). These stocks are Herc Holdings Inc. (NYSE:HRI), The Howard Hughes Corporation (NYSE:HHC), Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS), Driven Brands Holdings Inc. (NASDAQ:DRVN), Vimeo Inc. (NASDAQ:VMEO), Diversey Holdings, Ltd. (NASDAQ:DSEY), and The Wendy’s Company (NASDAQ:WEN). All of these stocks’ market caps resemble JBLU’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HRI | 24 | 1535284 | 4 |
| HHC | 25 | 1469334 | 0 |
| SBS | 6 | 250306 | -5 |
| DRVN | 24 | 183807 | 5 |
| VMEO | 36 | 465295 | 36 |
| DSEY | 8 | 140678 | -4 |
| WEN | 33 | 949810 | 3 |
| Average | 22.3 | 713502 | 5.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $714 million. That figure was $371 million in JBLU’s case. Vimeo Inc. (NASDAQ:VMEO) is the most popular stock in this table. On the other hand Companhia de Saneamento Básico do Estado de São Paulo – SABESP (NYSE:SBS) is the least popular one with only 6 bullish hedge fund positions. JetBlue Airways Corporation (NASDAQ:JBLU) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JBLU is 69.8. 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, JBLU wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JBLU were disappointed as the stock returned -4.3% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow Jetblue Airways Corp (NASDAQ:JBLU)
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Disclosure: None. This article was originally published at Insider Monkey.
