We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Brighthouse Financial, Inc. (NASDAQ:BHF) based on that data.
Brighthouse Financial, Inc. (NASDAQ:BHF) has seen a decrease in hedge fund interest lately. BHF was in 25 hedge funds’ portfolios at the end of the first quarter of 2020. There were 43 hedge funds in our database with BHF holdings at the end of the previous quarter. Our calculations also showed that BHF isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the fresh hedge fund action encompassing Brighthouse Financial, Inc. (NASDAQ:BHF).
What have hedge funds been doing with Brighthouse Financial, Inc. (NASDAQ:BHF)?
At Q1’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -42% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in BHF over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Greenlight Capital held the most valuable stake in Brighthouse Financial, Inc. (NASDAQ:BHF), which was worth $88 million at the end of the third quarter. On the second spot was Miller Value Partners which amassed $44.4 million worth of shares. Arrowstreet Capital, Lomas Capital Management, and AQR Capital 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 Greenlight Capital allocated the biggest weight to Brighthouse Financial, Inc. (NASDAQ:BHF), around 12.53% of its 13F portfolio. Lomas Capital Management is also relatively very bullish on the stock, earmarking 4 percent of its 13F equity portfolio to BHF.
Because Brighthouse Financial, Inc. (NASDAQ:BHF) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there were a few funds that elected to cut their positions entirely last quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP cut the biggest position of all the hedgies tracked by Insider Monkey, valued at about $14.5 million in stock. Renaissance Technologies, also dropped its stock, about $8.5 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 18 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Brighthouse Financial, Inc. (NASDAQ:BHF). We will take a look at Qurate Retail, Inc. (NASDAQ:QRTEA), Lexington Realty Trust (NYSE:LXP), Air Lease Corp (NYSE:AL), and Blackstone Mortgage Trust Inc (NYSE:BXMT). This group of stocks’ market caps match BHF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| QRTEA | 32 | 477820 | -7 |
| LXP | 10 | 41143 | -4 |
| AL | 20 | 378732 | -3 |
| BXMT | 19 | 56818 | 4 |
| Average | 20.25 | 238628 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $239 million. That figure was $373 million in BHF’s case. Qurate Retail, Inc. (NASDAQ:QRTEA) is the most popular stock in this table. On the other hand Lexington Realty Trust (NYSE:LXP) is the least popular one with only 10 bullish hedge fund positions. Brighthouse Financial, Inc. (NASDAQ:BHF) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on BHF as the stock returned 43.7% in Q2 (through June 10th) 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.
