Amid an overall bull market, many stocks that smart money investors were collectively bullish on surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That’s why we weren’t surprised when hedge funds’ top 20 large-cap stock picks generated a return of 37.6% in 2019 (through the end of November) and outperformed the broader market benchmark by 9.9 percentage points.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Hedge fund interest in Beasley Broadcast Group Inc (NASDAQ:BBGI) shares was flat at the end of last quarter. This is usually a negative indicator. 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 PB Bancorp, Inc. (NASDAQ:PBBI), Platinum Group Metals Ltd. (NYSE:PLG), and Rosehill Resources Inc. (NASDAQ:ROSE) to gather more data points. Our calculations also showed that BBGI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are viewed as worthless, old investment vehicles of years past. While there are more than 8000 funds trading today, Our researchers hone in on the leaders of this club, approximately 750 funds. It is estimated that this group of investors have their hands on bulk of the hedge fund industry’s total asset base, and by following their top stock picks, Insider Monkey has figured out a few investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Mario Gabelli of GAMCO Investors
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind let’s check out the recent hedge fund action encompassing Beasley Broadcast Group Inc (NASDAQ:BBGI).
What does smart money think about Beasley Broadcast Group Inc (NASDAQ:BBGI)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BBGI over the last 17 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Mario Gabelli’s GAMCO Investors has the largest position in Beasley Broadcast Group Inc (NASDAQ:BBGI), worth close to $3.5 million, comprising less than 0.1%% of its total 13F portfolio. On GAMCO Investors’s heels is Renaissance Technologies holding a $1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism encompass Warren Lammert’s Granite Point Capital, Donald Sussman’s Paloma Partners and . In terms of the portfolio weights assigned to each position Granite Point Capital allocated the biggest weight to Beasley Broadcast Group Inc (NASDAQ:BBGI), around 0.08% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, setting aside 0.03 percent of its 13F equity portfolio to BBGI.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Beasley Broadcast Group Inc (NASDAQ:BBGI) but similarly valued. We will take a look at PB Bancorp, Inc. (NASDAQ:PBBI), Platinum Group Metals Ltd. (NYSE:PLG), Rosehill Resources Inc. (NASDAQ:ROSE), and Orion Energy Systems, Inc. (NASDAQ:OESX). This group of stocks’ market caps are similar to BBGI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PBBI | 4 | 5008 | 1 |
| PLG | 4 | 1455 | 0 |
| ROSE | 5 | 2051 | 0 |
| OESX | 6 | 7956 | -1 |
| Average | 4.75 | 4118 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.75 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $5 million in BBGI’s case. Orion Energy Systems, Inc. (NASDAQ:OESX) is the most popular stock in this table. On the other hand PB Bancorp, Inc. (NASDAQ:PBBI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Beasley Broadcast Group Inc (NASDAQ:BBGI) is even less popular than PBBI. Hedge funds dodged a bullet by taking a bearish stance towards BBGI. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately BBGI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BBGI investors were disappointed as the stock returned -8.4% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
