The market has been volatile in the fourth quarter as the Federal Reserve continued its rate hikes to normalize the interest rates. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by nearly 7 percentage points. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure since summer months, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of John Bean Technologies Corporation (NYSE:JBT) and find out how it is affected by hedge funds’ moves.
John Bean Technologies Corporation (NYSE:JBT) shareholders have witnessed a decrease in enthusiasm from smart money recently. JBT was in 9 hedge funds’ portfolios at the end of December. There were 13 hedge funds in our database with JBT holdings at the end of the previous quarter. Our calculations also showed that JBT isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a peek at the new hedge fund action encompassing John Bean Technologies Corporation (NYSE:JBT).
Hedge fund activity in John Bean Technologies Corporation (NYSE:JBT)
At Q4’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the second quarter of 2018. On the other hand, there were a total of 11 hedge funds with a bullish position in JBT a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of John Bean Technologies Corporation (NYSE:JBT), with a stake worth $55.4 million reported as of the end of September. Trailing Royce & Associates was D E Shaw, which amassed a stake valued at $2.4 million. Citadel Investment Group, PEAK6 Capital Management, and GAMCO Investors were also very fond of the stock, giving the stock large weights in their portfolios.
Because John Bean Technologies Corporation (NYSE:JBT) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there exists a select few funds who sold off their full holdings by the end of the third quarter. Interestingly, Cliff Asness’s AQR Capital Management cut the largest stake of the 700 funds watched by Insider Monkey, totaling about $0.9 million in stock. David Harding’s fund, Winton Capital Management, also dumped its stock, about $0.7 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as John Bean Technologies Corporation (NYSE:JBT) but similarly valued. We will take a look at Acadia Healthcare Company Inc (NASDAQ:ACHC), Monro, Inc. (NASDAQ:MNRO), Genesis Energy, L.P. (NYSE:GEL), and Spectrum Brands Holdings, Inc. (NYSE:SPB). This group of stocks’ market values match JBT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACHC | 18 | 309481 | -1 |
| MNRO | 18 | 179953 | 8 |
| GEL | 5 | 7438 | 3 |
| SPB | 25 | 576863 | -1 |
| Average | 16.5 | 268434 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $268 million. That figure was $60 million in JBT’s case. Spectrum Brands Holdings, Inc. (NYSE:SPB) is the most popular stock in this table. On the other hand Genesis Energy, L.P. (NYSE:GEL) is the least popular one with only 5 bullish hedge fund positions. John Bean Technologies Corporation (NYSE:JBT) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on JBT as the stock returned 43.4% and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
