A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Braemar Hotels & Resorts Inc. (NYSE:BHR).
Braemar Hotels & Resorts Inc. (NYSE:BHR) shareholders have witnessed an increase in enthusiasm from smart money recently. Braemar Hotels & Resorts Inc. (NYSE:BHR) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BHR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Chuck Royce of Royce & Associates
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. With all of this in mind we’re going to view the new hedge fund action surrounding Braemar Hotels & Resorts Inc. (NYSE:BHR).
Do Hedge Funds Think BHR Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BHR over the last 24 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, King Street Capital, managed by Brian J. Higgins, holds the largest position in Braemar Hotels & Resorts Inc. (NYSE:BHR). King Street Capital has a $10.9 million position in the stock, comprising 0.9% of its 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $9.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish encompass Aaron Wertentheil’s Jones Road Capital Management, Leonard Green’s Leonard Green & Partners and Chuck Royce’s Royce & Associates. In terms of the portfolio weights assigned to each position Jones Road Capital Management allocated the biggest weight to Braemar Hotels & Resorts Inc. (NYSE:BHR), around 2.41% of its 13F portfolio. King Street Capital is also relatively very bullish on the stock, earmarking 0.89 percent of its 13F equity portfolio to BHR.
As industrywide interest jumped, key money managers were leading the bulls’ herd. King Street Capital, managed by Brian J. Higgins, assembled the most valuable position in Braemar Hotels & Resorts Inc. (NYSE:BHR). King Street Capital had $10.9 million invested in the company at the end of the quarter. Tom Wagner and Ara Cohen’s Knighthead Capital also made a $2.2 million investment in the stock during the quarter. The following funds were also among the new BHR investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Greg Eisner’s Engineers Gate Manager, and Peter Algert’s Algert Global.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Braemar Hotels & Resorts Inc. (NYSE:BHR) but similarly valued. We will take a look at Cerecor Inc. (NASDAQ:CERC), Cogent Biosciences, Inc. (NASDAQ:COGT), Limoneira Company (NASDAQ:LMNR), Utah Medical Products, Inc. (NASDAQ:UTMD), Verrica Pharmaceuticals Inc. (NASDAQ:VRCA), Carrols Restaurant Group, Inc. (NASDAQ:TAST), and Huize Holding Limited (NASDAQ:HUIZ). All of these stocks’ market caps resemble BHR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CERC | 10 | 170042 | 0 |
| COGT | 19 | 142338 | -8 |
| LMNR | 4 | 2377 | 2 |
| UTMD | 4 | 26318 | 0 |
| VRCA | 6 | 61684 | -1 |
| TAST | 16 | 17178 | 3 |
| HUIZ | 2 | 1320 | 0 |
| Average | 8.7 | 60180 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.7 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $58 million in BHR’s case. Cogent Biosciences, Inc. (NASDAQ:COGT) is the most popular stock in this table. On the other hand Huize Holding Limited (NASDAQ:HUIZ) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Braemar Hotels & Resorts Inc. (NYSE:BHR) is more popular among hedge funds. Our overall hedge fund sentiment score for BHR 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% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately BHR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BHR were disappointed as the stock returned -16.2% since the end of the second quarter (through 10/22) 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.
Follow Braemar Hotels & Resorts Inc. (NYSE:BHR)
Follow Braemar Hotels & Resorts Inc. (NYSE:BHR)
Suggested Articles:
- 12 Best MLP and Pipeline Stocks To Buy
- 15 Largest Transportation Companies In The World
- 25 Best US Cities To Live with Asthma
Disclosure: None. This article was originally published at Insider Monkey.
