The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Sally Beauty Holdings, Inc. (NYSE:SBH).
Sally Beauty Holdings, Inc. (NYSE:SBH) investors should be aware of a decrease in hedge fund interest in recent months. Sally Beauty Holdings, Inc. (NYSE:SBH) was in 19 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 28. There were 23 hedge funds in our database with SBH holdings at the end of December. Our calculations also showed that SBH isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 115 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, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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 we’re going to take a glance at the new hedge fund action regarding Sally Beauty Holdings, Inc. (NYSE:SBH).
Do Hedge Funds Think SBH Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SBH over the last 23 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.
According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the most valuable position in Sally Beauty Holdings, Inc. (NYSE:SBH), worth close to $40.8 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is GAMCO Investors, led by Mario Gabelli, holding a $16.7 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism include Michael Zimmerman’s Prentice Capital Management, Renaissance Technologies and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Prentice Capital Management allocated the biggest weight to Sally Beauty Holdings, Inc. (NYSE:SBH), around 4.98% of its 13F portfolio. Stormborn Capital Management is also relatively very bullish on the stock, earmarking 2.28 percent of its 13F equity portfolio to SBH.
Since Sally Beauty Holdings, Inc. (NYSE:SBH) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there exists a select few funds who were dropping their entire stakes heading into Q2. At the top of the heap, Israel Englander’s Millennium Management said goodbye to the largest stake of all the hedgies tracked by Insider Monkey, valued at an estimated $60.8 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund dropped about $8.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 4 funds heading into Q2.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sally Beauty Holdings, Inc. (NYSE:SBH) but similarly valued. These stocks are Globalstar, Inc. (PINK:GSAT), Strategic Education Inc (NASDAQ:STRA), BTRS Holdings Inc. (NASDAQ:BTRS), Bionano Genomics, Inc. (NASDAQ:BNGO), Morphic Holding, Inc. (NASDAQ:MORF), Retail Properties of America Inc (NYSE:RPAI), and Inter Parfums, Inc. (NASDAQ:IPAR). This group of stocks’ market values resemble SBH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GSAT | 10 | 163384 | 1 |
| STRA | 16 | 232233 | 1 |
| BTRS | 26 | 310999 | 26 |
| BNGO | 10 | 108374 | 5 |
| MORF | 22 | 425543 | 7 |
| RPAI | 9 | 29224 | 3 |
| IPAR | 9 | 88058 | -3 |
| Average | 14.6 | 193974 | 5.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $194 million. That figure was $127 million in SBH’s case. BTRS Holdings Inc. (NASDAQ:BTRS) is the most popular stock in this table. On the other hand Retail Properties of America Inc (NYSE:RPAI) is the least popular one with only 9 bullish hedge fund positions. Sally Beauty Holdings, Inc. (NYSE:SBH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBH is 50.8. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately SBH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SBH were disappointed as the stock returned 2.2% since the end of March (through 7/16) 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.
Follow Sally Beauty Holdings Inc. (NYSE:SBH)
Follow Sally Beauty Holdings Inc. (NYSE:SBH)
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Disclosure: None. This article was originally published at Insider Monkey.
