In this article we are going to use hedge fund sentiment as a tool and determine whether Blackstone Inc. (NYSE:BX) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Blackstone Inc. (NYSE:BX) a buy here? Money managers were in an optimistic mood. The number of bullish hedge fund bets moved up by 5 in recent months. Blackstone Inc. (NYSE:BX) was in 54 hedge funds’ portfolios at the end of June. The all time high for this statistic is 54. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 49 hedge funds in our database with BX holdings at the end of March.
In the eyes of most stock holders, hedge funds are perceived as slow, outdated financial vehicles of years past. While there are greater than 8000 funds trading today, Our researchers hone in on the upper echelon of this group, around 850 funds. These money managers have their hands on most of the smart money’s total capital, and by following their unrivaled stock picks, Insider Monkey has brought to light many investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .
Tom Gayner of Markel Gayner Asset Management
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Do Hedge Funds Think BX Is A Good Stock To Buy Now?
At Q2’s end, a total of 54 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the first quarter of 2020. By comparison, 47 hedge funds held shares or bullish call options in BX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GQG Partners was the largest shareholder of Blackstone Inc. (NYSE:BX), with a stake worth $472.3 million reported as of the end of June. Trailing GQG Partners was Farallon Capital, which amassed a stake valued at $283.8 million. Cryder Capital, Millennium Management, and Markel Gayner Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Arrow Capital Management allocated the biggest weight to Blackstone Inc. (NYSE:BX), around 16.99% of its 13F portfolio. Cryder Capital is also relatively very bullish on the stock, earmarking 12.09 percent of its 13F equity portfolio to BX.
As one would reasonably expect, key money managers were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, established the most valuable position in Blackstone Inc. (NYSE:BX). Balyasny Asset Management had $32.3 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $5.3 million investment in the stock during the quarter. The following funds were also among the new BX investors: James Dinan’s York Capital Management, Benjamin A. Smith’s Laurion Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Blackstone Inc. (NYSE:BX) but similarly valued. We will take a look at HCA Healthcare Inc (NYSE:HCA), ABB Ltd (NYSE:ABB), Twilio Inc. (NYSE:TWLO), Moody’s Corporation (NYSE:MCO), Banco Santander, S.A. (NYSE:SAN), VMware, Inc. (NYSE:VMW), and Intercontinental Exchange Inc (NYSE:ICE). This group of stocks’ market caps are closest to BX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HCA | 60 | 2695782 | -2 |
| ABB | 15 | 658036 | 4 |
| TWLO | 98 | 7891057 | -1 |
| MCO | 44 | 16046255 | -11 |
| SAN | 17 | 566333 | 2 |
| VMW | 28 | 819778 | 3 |
| ICE | 47 | 2946268 | -11 |
| Average | 44.1 | 4517644 | -2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 44.1 hedge funds with bullish positions and the average amount invested in these stocks was $4518 million. That figure was $2080 million in BX’s case. Twilio Inc. (NYSE:TWLO) is the most popular stock in this table. On the other hand ABB Ltd (NYSE:ABB) is the least popular one with only 15 bullish hedge fund positions. Blackstone Inc. (NYSE:BX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BX is 63.5. 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. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on BX as the stock returned 19.9% since the end of Q2 (through 10/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
