Hedge Funds Are Selling Baker Hughes Company Class A Common Stock (BKR)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Baker Hughes Company Class A Common Stock (NASDAQ:BKR).

Is Baker Hughes Company Class A Common Stock (NASDAQ:BKR) a safe investment right now? The smart money was getting less optimistic. The number of long hedge fund positions were cut by 3 recently. Baker Hughes Company Class A Common Stock (NASDAQ:BKR) was in 37 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. Our calculations also showed that BKR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 40 hedge funds in our database with BKR positions at the end of the second quarter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s go over the key hedge fund action regarding Baker Hughes Company Class A Common Stock (NASDAQ:BKR).

Richard S. Pzena of Pzena Investment Management

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

At Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the second quarter of 2021. By comparison, 28 hedge funds held shares or bullish call options in BKR 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.

Among these funds, Pzena Investment Management held the most valuable stake in Baker Hughes Company Class A Common Stock (NASDAQ:BKR), which was worth $598.7 million at the end of the third quarter. On the second spot was Millennium Management which amassed $71.5 million worth of shares. Iridian Asset Management, Citadel Investment Group, and Encompass 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 AltraVue Capital allocated the biggest weight to Baker Hughes Company Class A Common Stock (NASDAQ:BKR), around 3.46% of its 13F portfolio. Encompass Capital Advisors is also relatively very bullish on the stock, designating 2.59 percent of its 13F equity portfolio to BKR.

Since Baker Hughes Company Class A Common Stock (NASDAQ:BKR) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there was a specific group of hedgies that slashed their entire stakes heading into Q4. Intriguingly, Clint Carlson’s Carlson Capital said goodbye to the biggest position of all the hedgies watched by Insider Monkey, valued at about $10.3 million in stock. Mark Kingdon’s fund, Kingdon Capital, also dumped its stock, about $9.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Baker Hughes Company Class A Common Stock (NASDAQ:BKR) but similarly valued. We will take a look at W.W. Grainger, Inc. (NYSE:GWW), Live Nation Entertainment, Inc. (NYSE:LYV), Ingersoll Rand Inc. (NYSE:IR), Steris Plc (NYSE:STE), The Cooper Companies, Inc. (NYSE:COO), Regions Financial Corporation (NYSE:RF), and The Clorox Company (NYSE:CLX). This group of stocks’ market values resemble BKR’s market value.

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As you can see these stocks had an average of 34.4 hedge funds with bullish positions and the average amount invested in these stocks was $951 million. That figure was $1014 million in BKR’s case. Live Nation Entertainment, Inc. (NYSE:LYV) is the most popular stock in this table. On the other hand W.W. Grainger, Inc. (NYSE:GWW) is the least popular one with only 28 bullish hedge fund positions. Baker Hughes Company Class A Common Stock (NASDAQ:BKR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BKR is 52.1. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately BKR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BKR were disappointed as the stock returned -4.9% since the end of September (through 11/30) 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.