Hedge Funds Aren’t Crazy About Brighthouse Financial, Inc. (BHF) Anymore

We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article, we look at what those funds think of Brighthouse Financial, Inc. (NASDAQ:BHF) based on that data.

Is Brighthouse Financial, Inc. (NASDAQ:BHF) the right investment to pursue these days? The best stock pickers were becoming less confident. The number of long hedge fund bets went down by 2 lately. Brighthouse Financial, Inc. (NASDAQ:BHF) was in 26 hedge funds’ portfolios at the end of June. The all time high for this statistic is 43. Our calculations also showed that BHF isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 28 hedge funds in our database with BHF holdings at the end of March.

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.

David Einhorn of Greenlight 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 we’re going to go over the recent hedge fund action regarding Brighthouse Financial, Inc. (NASDAQ:BHF).

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

Heading into the third quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BHF over the last 24 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Among these funds, Greenlight Capital held the most valuable stake in Brighthouse Financial, Inc. (NASDAQ:BHF), which was worth $165.8 million at the end of the second quarter. On the second spot was Arrowstreet Capital which amassed $77 million worth of shares. EJF Capital, Masters Capital Management, and Diamond Hill 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 Greenlight Capital allocated the biggest weight to Brighthouse Financial, Inc. (NASDAQ:BHF), around 10.41% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, setting aside 5.02 percent of its 13F equity portfolio to BHF.

Because Brighthouse Financial, Inc. (NASDAQ:BHF) has faced falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers that decided to sell off their entire stakes last quarter. Interestingly, Sander Gerber’s Hudson Bay Capital Management dumped the biggest investment of all the hedgies watched by Insider Monkey, worth about $7.7 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $2.7 million worth. These moves are interesting, as total hedge fund interest fell by 2 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Brighthouse Financial, Inc. (NASDAQ:BHF) but similarly valued. These stocks are ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), Cushman & Wakefield plc (NYSE:CWK), Ormat Technologies, Inc. (NYSE:ORA), Freedom Holding Corp. (NASDAQ:FRHC), National Storage Affiliates Trust (NYSE:NSA), Ambarella Inc (NASDAQ:AMBA), and Aerojet Rocketdyne Holdings Inc (NYSE:AJRD). This group of stocks’ market caps are closest to BHF’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $477 million. That figure was $494 million in BHF’s case. Ambarella Inc (NASDAQ:AMBA) is the most popular stock in this table. On the other hand Freedom Holding Corp. (NASDAQ:FRHC) is the least popular one with only 13 bullish hedge fund positions. Brighthouse Financial, Inc. (NASDAQ:BHF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BHF is 48.2. 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 BHF as the stock returned 8.4% since the end of Q2 (through 10/15) 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.