Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. Between November 1, 2014 and October 30 of this year, less than 49% of the stocks in the S&P 500 beat the market. However, hedge funds’ top 30 stock picks from the index had a much higher success rate than this, at 63%. The returns from these 30 stocks also easily bested the broader market, at 9.5% compared to 5.2%, despite there being a few duds in there like Micron and Anadarko (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
Boise Cascade Co (NYSE:BCC) shareholders have witnessed an increase in hedge fund interest in recent months, with the stock being held in 4 more smart money portfolios. At the end of this article we will also compare BCC to other stocks including Semtech Corporation (NASDAQ:SMTC), II-VI, Inc. (NASDAQ:IIVI), and BancFirst Corporation (NASDAQ:BANF) to get a better sense of its popularity.
Follow Boise Cascade Co (NYSE:BCC)
Follow Boise Cascade Co (NYSE:BCC)
To most market participants, hedge funds are assumed to be unimportant, old investment vehicles of years past. While there are over 8,000 funds with their doors open today, our experts choose to focus on the crème de la crème of this club, approximately 700 funds. These investment experts manage most of all hedge funds’ total capital, and by watching their unrivaled stock picks, Insider Monkey has found many investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, we’re going to go over the recent action surrounding Boise Cascade Co (NYSE:BCC).
How have hedgies been trading Boise Cascade Co (NYSE:BCC)?
Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a 25% rise from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in Boise Cascade Co (NYSE:BCC). Adage Capital Management has a $28.5 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Bridger Management, led by Roberto Mignone, holding a $22.8 million position; 1.6% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish comprise Lee Munder’s Lee Munder Capital Group, Glenn Russell Dubin’s Highbridge Capital Management and Israel Englander’s Millennium Management.
As aggregate interest increased, key money managers were leading the bulls’ herd. Adage Capital Management initiated the most valuable position in Boise Cascade Co (NYSE:BCC). Anand Parekh’s Alyeska Investment Group also initiated a $4.4 million position during the quarter. The other funds with brand new BCC positions are David Keidan’s Buckingham Capital Management, Renaissance Technologies, and Peter Muller’s PDT Partners.
Let’s now review hedge fund activity in other stocks similar to Boise Cascade Co (NYSE:BCC). These stocks are Semtech Corporation (NASDAQ:SMTC), II-VI, Inc. (NASDAQ:IIVI), BancFirst Corporation (NASDAQ:BANF), and Exterran Partners, L.P. (NASDAQ:EXLP). All of these stocks’ market caps are closest to BCC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SMTC | 13 | 64383 | -2 |
| IIVI | 15 | 62809 | -1 |
| BANF | 5 | 31421 | -1 |
| EXLP | 6 | 27563 | 1 |
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $100 million in BCC’s case. II-VI, Inc. (NASDAQ:IIVI) is the most popular stock in this table. On the other hand BancFirst Corporation (NASDAQ:BANF) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Boise Cascade Co (NYSE:BCC) is more popular among hedge funds and has more money invested in it. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
