“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Brunswick Corporation (NYSE:BC) and see how it was affected.
Is Brunswick Corporation (NYSE:BC) a buy, sell, or hold? Investors who are in the know are becoming more confident. The number of bullish hedge fund bets improved by 4 in recent months. Our calculations also showed that bc isn’t among the 30 most popular stocks among hedge funds. BC was in 34 hedge funds’ portfolios at the end of the third quarter of 2018. There were 30 hedge funds in our database with BC holdings at the end of the previous quarter.
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 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 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 look at the latest hedge fund action regarding Brunswick Corporation (NYSE:BC).
What have hedge funds been doing with Brunswick Corporation (NYSE:BC)?
At Q3’s end, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BC over the last 13 quarters. 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 Brunswick Corporation (NYSE:BC) was held by Adage Capital Management, which reported holding $150.5 million worth of stock at the end of September. It was followed by Lakewood Capital Management with a $95.6 million position. Other investors bullish on the company included D E Shaw, Owl Creek Asset Management, and AQR Capital Management.
Now, key money managers have been driving this bullishness. SG Capital Management, managed by Ken Grossman and Glen Schneider, established the biggest position in Brunswick Corporation (NYSE:BC). SG Capital Management had $18.5 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $12.2 million investment in the stock during the quarter. The other funds with brand new BC positions are Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Dmitry Balyasny’s Balyasny Asset Management, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s now review hedge fund activity in other stocks similar to Brunswick Corporation (NYSE:BC). These stocks are Genpact Limited (NYSE:G), ICU Medical, Inc. (NASDAQ:ICUI), Ligand Pharmaceuticals Inc. (NASDAQ:LGND), and Gentex Corporation (NASDAQ:GNTX). This group of stocks’ market caps resemble BC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| G | 21 | 547304 | 0 |
| ICUI | 35 | 566997 | 2 |
| LGND | 28 | 544013 | 6 |
| GNTX | 27 | 312500 | 1 |
| Average | 27.75 | 492704 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $493 million. That figure was $794 million in BC’s case. ICU Medical, Inc. (NASDAQ:ICUI) is the most popular stock in this table. On the other hand Genpact Limited (NYSE:G) is the least popular one with only 21 bullish hedge fund positions. Brunswick Corporation (NYSE:BC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ICUI might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
