Hedge Funds Are Souring On Jabil Inc. (JBL)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Jabil Inc. (NYSE:JBL) in this article.

Jabil Inc. (NYSE:JBL) was in 24 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 34. JBL investors should be aware of a decrease in support from the world’s most elite money managers of late. There were 28 hedge funds in our database with JBL holdings at the end of December. Our calculations also showed that JBL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you’d ask most traders, hedge funds are perceived as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds trading today, Our experts hone in on the elite of this group, around 850 funds. These investment experts orchestrate the lion’s share of all hedge funds’ total asset base, and by observing their highest performing investments, Insider Monkey has uncovered a few investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Phillip Gross of Adage Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. Keeping this in mind we’re going to take a look at the latest hedge fund action encompassing Jabil Inc. (NYSE:JBL).

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

At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards JBL over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Point72 Asset Management was the largest shareholder of Jabil Inc. (NYSE:JBL), with a stake worth $167.2 million reported as of the end of March. Trailing Point72 Asset Management was Adage Capital Management, which amassed a stake valued at $76.1 million. AQR Capital Management, Millennium Management, and Citadel Investment Group 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 Force Hill Capital Management allocated the biggest weight to Jabil Inc. (NYSE:JBL), around 4.61% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, designating 0.78 percent of its 13F equity portfolio to JBL.

Judging by the fact that Jabil Inc. (NYSE:JBL) has witnessed declining sentiment from the smart money, it’s safe to say that there were a few fund managers who sold off their entire stakes last quarter. At the top of the heap, Anand Parekh’s Alyeska Investment Group dumped the largest stake of the “upper crust” of funds monitored by Insider Monkey, comprising about $77.8 million in stock, and Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital was right behind this move, as the fund said goodbye to about $40.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 4 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Jabil Inc. (NYSE:JBL). We will take a look at Yatsen Holding Limited (NYSE:YSG), Concentrix Corporation (NASDAQ:CNXC), Ternium S.A. (NYSE:TX), Fiverr International Ltd. (NYSE:FVRR), National Retail Properties, Inc. (NYSE:NNN), Anaplan, Inc. (NYSE:PLAN), and Fate Therapeutics Inc (NASDAQ:FATE). This group of stocks’ market valuations match JBL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $957 million. That figure was $467 million in JBL’s case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand Ternium S.A. (NYSE:TX) is the least popular one with only 14 bullish hedge fund positions. Jabil Inc. (NYSE:JBL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for JBL is 34.4. 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. This is a slightly negative signal and 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately JBL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); JBL investors were disappointed as the stock returned 5.4% since the end of March (through 7/16) 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 in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.