Hedge Funds Are Crazy About BGC Partners, Inc. (BGCP)

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards BGC Partners, Inc. (NASDAQ:BGCP) changed recently.

Is BGC Partners, Inc. (NASDAQ:BGCP) a buy here? Prominent investors were betting on the stock. The number of bullish hedge fund positions improved by 10 lately. BGC Partners, Inc. (NASDAQ:BGCP) was in 31 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BGCP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 21 hedge funds in our database with BGCP positions at the end of the first quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Michael Gelband of ExodusPoint Capital

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. Now let’s take a look at the latest hedge fund action regarding BGC Partners, Inc. (NASDAQ:BGCP).

Do Hedge Funds Think BGCP Is A Good Stock To Buy Now?

At second quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 48% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in BGCP a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in BGC Partners, Inc. (NASDAQ:BGCP) was held by Arctis Global, which reported holding $101.7 million worth of stock at the end of June. It was followed by Cardinal Capital with a $92.9 million position. Other investors bullish on the company included Rubric Capital Management, Alyeska Investment Group, and ExodusPoint Capital. In terms of the portfolio weights assigned to each position Arctis Global allocated the biggest weight to BGC Partners, Inc. (NASDAQ:BGCP), around 16.55% of its 13F portfolio. AltraVue Capital is also relatively very bullish on the stock, dishing out 4.87 percent of its 13F equity portfolio to BGCP.

Now, key hedge funds were breaking ground themselves. AltraVue Capital, managed by Touk Sinantha, assembled the most outsized position in BGC Partners, Inc. (NASDAQ:BGCP). AltraVue Capital had $13 million invested in the company at the end of the quarter. Viraj Mehta’s Arctis Global also initiated a $11.3 million position during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Orkun Kilic’s Berry Street Capital, and Daniel Johnson’s Gillson Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BGC Partners, Inc. (NASDAQ:BGCP) but similarly valued. We will take a look at Repay Holdings Corporation (NASDAQ:RPAY), SkyWest, Inc. (NASDAQ:SKYW), Valaris Plc (NYSE:VAL), bluebird bio Inc (NASDAQ:BLUE), Clean Energy Fuels Corp (NASDAQ:CLNE), Newmark Group, Inc. (NASDAQ:NMRK), and HeadHunter Group PLC (NASDAQ:HHR). All of these stocks’ market caps are similar to BGCP’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.4 hedge funds with bullish positions and the average amount invested in these stocks was $224 million. That figure was $404 million in BGCP’s case. Valaris Plc (NYSE:VAL) is the most popular stock in this table. On the other hand SkyWest, Inc. (NASDAQ:SKYW) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks BGC Partners, Inc. (NASDAQ:BGCP) is more popular among hedge funds. Our overall hedge fund sentiment score for BGCP is 90. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Unfortunately BGCP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BGCP were disappointed as the stock returned -2.3% since the end of the second quarter (through 10/15) 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 most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.