As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about BTRS Holdings Inc. (NASDAQ:BTRS).
Is BTRS Holdings Inc. (NASDAQ:BTRS) the right pick for your portfolio? The smart money was turning less bullish. The number of bullish hedge fund bets retreated by 5 recently. BTRS Holdings Inc. (NASDAQ:BTRS) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic is 26. Our calculations also showed that BTRS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s go over the fresh hedge fund action encompassing BTRS Holdings Inc. (NASDAQ:BTRS).
Do Hedge Funds Think BTRS Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BTRS over the last 24 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 BTRS Holdings Inc. (NASDAQ:BTRS) was held by Select Equity Group, which reported holding $58.9 million worth of stock at the end of June. It was followed by Washington Harbour Partners with a $41.1 million position. Other investors bullish on the company included Senator Investment Group, BlueCrest Capital Mgmt., and Rima Senvest Management. In terms of the portfolio weights assigned to each position Portsea Asset Management allocated the biggest weight to BTRS Holdings Inc. (NASDAQ:BTRS), around 7.68% of its 13F portfolio. Washington Harbour Partners is also relatively very bullish on the stock, earmarking 6.48 percent of its 13F equity portfolio to BTRS.
Seeing as BTRS Holdings Inc. (NASDAQ:BTRS) has experienced falling interest from the smart money, we can see that there is a sect of fund managers that decided to sell off their positions entirely in the second quarter. It’s worth mentioning that Brandon Haley’s Holocene Advisors sold off the largest position of the 750 funds monitored by Insider Monkey, valued at an estimated $7.2 million in stock, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt. was right behind this move, as the fund said goodbye to about $5.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 5 funds in the second quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BTRS Holdings Inc. (NASDAQ:BTRS) but similarly valued. These stocks are NuStar Energy L.P. (NYSE:NS), Genworth Financial Inc (NYSE:GNW), Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), McGrath RentCorp (NASDAQ:MGRC), Hercules Capital Inc (NYSE:HTGC), Kaiser Aluminum Corp. (NASDAQ:KALU), and Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY). This group of stocks’ market valuations match BTRS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NS | 3 | 24910 | -1 |
| GNW | 20 | 168414 | -4 |
| AAWW | 26 | 344696 | -3 |
| MGRC | 15 | 84697 | 2 |
| HTGC | 16 | 57724 | 6 |
| KALU | 10 | 65989 | -3 |
| PLAY | 28 | 408648 | 4 |
| Average | 16.9 | 165011 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.9 hedge funds with bullish positions and the average amount invested in these stocks was $165 million. That figure was $249 million in BTRS’s case. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 3 bullish hedge fund positions. BTRS Holdings Inc. (NASDAQ:BTRS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BTRS is 60.2. 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately BTRS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BTRS were disappointed as the stock returned -25.4% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
