Hedge Funds Are Selling Bunge Limited (BG)

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Bunge Limited (NYSE:BG).

Bunge Limited (NYSE:BG) was in 40 hedge funds’ portfolios at the end of June. The all time high for this statistic is 51. BG investors should be aware of a decrease in hedge fund interest of late. There were 44 hedge funds in our database with BG holdings at the end of March. Our calculations also showed that BG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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.

Gavin Saitowitz of Prelude Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech 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 analyze the new hedge fund action regarding Bunge Limited (NYSE:BG).

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

At the end of the second quarter, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from one quarter earlier. On the other hand, there were a total of 37 hedge funds with a bullish position in BG a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Anand Parekh’s Alyeska Investment Group has the largest position in Bunge Limited (NYSE:BG), worth close to $71.8 million, amounting to 0.8% of its total 13F portfolio. On Alyeska Investment Group’s heels is Millennium Management, managed by Israel Englander, which holds a $50.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism comprise Robert Pohly’s Samlyn Capital, Michael Price’s MFP Investors and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Yost Capital Management allocated the biggest weight to Bunge Limited (NYSE:BG), around 11.36% of its 13F portfolio. Horseman Capital Management is also relatively very bullish on the stock, dishing out 5.38 percent of its 13F equity portfolio to BG.

Seeing as Bunge Limited (NYSE:BG) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers that elected to cut their entire stakes by the end of the second quarter. At the top of the heap, Zach Schreiber’s Point State Capital said goodbye to the largest investment of all the hedgies monitored by Insider Monkey, valued at about $46.5 million in stock. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $38.1 million worth. These moves are important to note, as total hedge fund interest fell by 4 funds by the end of the second quarter.

Let’s now review hedge fund activity in other stocks similar to Bunge Limited (NYSE:BG). We will take a look at Qiagen NV (NYSE:QGEN), Morningstar, Inc. (NASDAQ:MORN), CF Industries Holdings, Inc. (NYSE:CF), Intellia Therapeutics, Inc. (NASDAQ:NTLA), Darling Ingredients Inc. (NYSE:DAR), Lightspeed Commerce Inc. (NYSE:LSPD), and Repligen Corporation (NASDAQ:RGEN). All of these stocks’ market caps match BG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.1 hedge funds with bullish positions and the average amount invested in these stocks was $1136 million. That figure was $399 million in BG’s case. CF Industries Holdings, Inc. (NYSE:CF) is the most popular stock in this table. On the other hand Qiagen NV (NYSE:QGEN) is the least popular one with only 22 bullish hedge fund positions. Bunge Limited (NYSE:BG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BG is 60.5. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on BG as the stock returned 9.4% since the end of Q2 (through 10/11) 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.