Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Boot Barn Holdings Inc (NYSE:BOOT)? The smart money sentiment can provide an answer to this question.
Boot Barn Holdings Inc (NYSE:BOOT) was in 29 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 28. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BOOT investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. There were 18 hedge funds in our database with BOOT holdings at the end of March. Our calculations also showed that BOOT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
To most investors, hedge funds are assumed to be underperforming, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation today, We look at the bigwigs of this club, about 850 funds. These investment experts orchestrate most of all hedge funds’ total asset base, and by shadowing their unrivaled picks, Insider Monkey has unearthed a number of investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated 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.
Richard Driehaus of Driehaus 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. With all of this in mind let’s review the latest hedge fund action regarding Boot Barn Holdings Inc (NYSE:BOOT).
Do Hedge Funds Think BOOT Is A Good Stock To Buy Now?
At the end of June, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 61% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BOOT over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Driehaus Capital held the most valuable stake in Boot Barn Holdings Inc (NYSE:BOOT), which was worth $67 million at the end of the second quarter. On the second spot was Two Sigma Advisors which amassed $18.7 million worth of shares. Citadel Investment Group, Deep Field Asset Management, and Sonic Capital 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 Sonic Capital allocated the biggest weight to Boot Barn Holdings Inc (NYSE:BOOT), around 5.75% of its 13F portfolio. Deep Field Asset Management is also relatively very bullish on the stock, dishing out 3.78 percent of its 13F equity portfolio to BOOT.
Consequently, some big names were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in Boot Barn Holdings Inc (NYSE:BOOT). Balyasny Asset Management had $12 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $11.1 million position during the quarter. The other funds with brand new BOOT positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Boot Barn Holdings Inc (NYSE:BOOT) but similarly valued. These stocks are Federal Signal Corporation (NYSE:FSS), FibroGen Inc (NASDAQ:FGEN), Forward Air Corporation (NASDAQ:FWRD), ESCO Technologies Inc. (NYSE:ESE), Vericel Corp (NASDAQ:VCEL), Shenandoah Telecommunications Company (NASDAQ:SHEN), and At Home Group Inc. (NYSE:HOME). This group of stocks’ market caps match BOOT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSS | 13 | 46834 | 0 |
| FGEN | 17 | 192268 | -1 |
| FWRD | 19 | 318287 | 6 |
| ESE | 13 | 78678 | 5 |
| VCEL | 19 | 86566 | 1 |
| SHEN | 7 | 122482 | -1 |
| HOME | 41 | 910361 | 11 |
| Average | 18.4 | 250782 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $251 million. That figure was $218 million in BOOT’s case. At Home Group Inc. (NYSE:HOME) is the most popular stock in this table. On the other hand Shenandoah Telecommunications Company (NASDAQ:SHEN) is the least popular one with only 7 bullish hedge fund positions. Boot Barn Holdings Inc (NYSE:BOOT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BOOT is 72.4. 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. Hedge funds were also right about betting on BOOT as the stock returned 14.8% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Boot Barn Holdings Inc. (NYSE:BOOT)
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Disclosure: None. This article was originally published at Insider Monkey.
