In this article we are going to use hedge fund sentiment as a tool and determine whether BTRS Holdings Inc. (NASDAQ:BTRS) 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 BTRS Holdings Inc. (NASDAQ:BTRS) an attractive investment right now? The smart money was taking an optimistic view. The number of long hedge fund bets increased by 26 recently. BTRS Holdings Inc. (NASDAQ:BTRS) was in 26 hedge funds’ portfolios at the end of March. Our calculations also showed that BTRS 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.
Michael Platt of BlueCrest Capital Mgmt.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. 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 let’s take a peek at the fresh hedge fund action surrounding BTRS Holdings Inc. (NASDAQ:BTRS).
Do Hedge Funds Think BTRS Is A Good Stock To Buy Now?
At Q1’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26 from the fourth quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in BTRS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Select Equity Group held the most valuable stake in BTRS Holdings Inc. (NASDAQ:BTRS), which was worth $59.5 million at the end of the fourth quarter. On the second spot was Washington Harbour Partners which amassed $40.8 million worth of shares. Senator Investment Group, BlueCrest Capital Mgmt., and Southpoint Capital Advisors 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 Portsea Asset Management allocated the biggest weight to BTRS Holdings Inc. (NASDAQ:BTRS), around 8.3% of its 13F portfolio. Washington Harbour Partners is also relatively very bullish on the stock, dishing out 6.84 percent of its 13F equity portfolio to BTRS.
As aggregate interest increased, key hedge funds have jumped into BTRS Holdings Inc. (NASDAQ:BTRS) headfirst. Select Equity Group, managed by Robert Joseph Caruso, assembled the largest position in BTRS Holdings Inc. (NASDAQ:BTRS). Select Equity Group had $59.5 million invested in the company at the end of the quarter. Mina Faltas’s Washington Harbour Partners also initiated a $40.8 million position during the quarter. The following funds were also among the new BTRS investors: Doug Silverman and Alexander Klabin’s Senator Investment Group, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and John Smith Clark’s Southpoint Capital Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as BTRS Holdings Inc. (NASDAQ:BTRS) but similarly valued. These stocks are Bionano Genomics, Inc. (NASDAQ:BNGO), Morphic Holding, Inc. (NASDAQ:MORF), Retail Properties of America Inc (NYSE:RPAI), Inter Parfums, Inc. (NASDAQ:IPAR), CareTrust REIT Inc (NASDAQ:CTRE), Echostar Corporation (NASDAQ:SATS), and NGM Biopharmaceuticals, Inc. (NASDAQ:NGM). This group of stocks’ market values are closest to BTRS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BNGO | 10 | 108374 | 5 |
| MORF | 22 | 425543 | 7 |
| RPAI | 9 | 29224 | 3 |
| IPAR | 9 | 88058 | -3 |
| CTRE | 15 | 81732 | -3 |
| SATS | 28 | 232110 | -3 |
| NGM | 18 | 329277 | 5 |
| Average | 15.9 | 184903 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $185 million. That figure was $311 million in BTRS’s case. Echostar Corporation (NASDAQ:SATS) 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. 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 81.6. 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 July 9th and beat the market again by 6.7 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 -11.2% since the end of March (through 7/9) 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.