Hedge Funds Are Souring On Janus International Group Inc (JBI)

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Janus International Group Inc (NYSE:JBI).

Janus International Group Inc (NYSE:JBI) has experienced a decrease in activity from the world’s largest hedge funds recently. Janus International Group Inc (NYSE:JBI) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 27. There were 23 hedge funds in our database with JBI holdings at the end of June. Our calculations also showed that JBI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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. With all of this in mind we’re going to go over the fresh hedge fund action encompassing Janus International Group Inc (NYSE:JBI).

Christian Leone of Luxor Capital Group

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

At third quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in JBI a year ago. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

Among these funds, Rima Senvest Management held the most valuable stake in Janus International Group Inc (NYSE:JBI), which was worth $45.2 million at the end of the third quarter. On the second spot was Luxor Capital Group which amassed $39.2 million worth of shares. Ratan Capital Group, Bayberry Capital Partners, and Corsair 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 Bayberry Capital Partners allocated the biggest weight to Janus International Group Inc (NYSE:JBI), around 10.24% of its 13F portfolio. Ratan Capital Group is also relatively very bullish on the stock, setting aside 4.72 percent of its 13F equity portfolio to JBI.

Because Janus International Group Inc (NYSE:JBI) has faced declining sentiment from hedge fund managers, it’s easy to see that there exists a select few hedgies that elected to cut their full holdings by the end of the third quarter. Interestingly, Andrew Weiss’s Weiss Asset Management cut the largest investment of the “upper crust” of funds followed by Insider Monkey, comprising about $28.3 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dropped about $26.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Janus International Group Inc (NYSE:JBI). We will take a look at Gulfport Energy Corporation (NYSE:GPOR), IVERIC bio, Inc. (NASDAQ:ISEE), Unisys Corporation (NYSE:UIS), Danaos Corporation (NYSE:DAC), Northwest Bancshares, Inc. (NASDAQ:NWBI), Aeva Technologies, Inc. (NYSE:AEVA), and ICF International Inc (NASDAQ:ICFI). This group of stocks’ market valuations match JBI’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $323 million. That figure was $283 million in JBI’s case. IVERIC bio, Inc. (NASDAQ:ISEE) is the most popular stock in this table. On the other hand Aeva Technologies, Inc. (NYSE:AEVA) is the least popular one with only 9 bullish hedge fund positions. Janus International Group Inc (NYSE:JBI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JBI is 50.9. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately JBI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JBI were disappointed as the stock returned 2.3% since the end of September (through 12/31) 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.