We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards John Bean Technologies Corp (NYSE:JBT), and what that likely means for the prospects of the company and its stock.
John Bean Technologies Corp (NYSE:JBT) investors should be aware of a decrease in hedge fund interest in recent months. JBT was in 15 hedge funds’ portfolios at the end of the third quarter of 2016. There were 20 hedge funds in our database with JBT holdings at the end of the previous quarter. At the end of this article we will also compare JBT to other stocks including RealPage, Inc. (NASDAQ:RP), Wright Medical Group Inc (NASDAQ:WMGI), and Exelixis, Inc. (NASDAQ:EXEL) to get a better sense of its popularity.
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What have hedge funds been doing with John Bean Technologies Corp (NYSE:JBT)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 25% decline from the previous quarter. The graph below displays the number of hedge funds with bullish position in JBT over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the largest position in John Bean Technologies Corp (NYSE:JBT), worth close to $31.9 million. Sitting at the No. 2 spot is Columbus Circle Investors, led by Principal Global Investors, which holds a $19.5 million position. Remaining peers with similar optimism encompass Ken Grossman and Glen Schneider’s SG Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Cliff Asness’ AQR Capital Management. We should note that SG Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as John Bean Technologies Corp (NYSE:JBT) has weathered falling interest from the entirety of the hedge funds we track, we can see that there were a few funds who sold off their entire stakes in the third quarter. Intriguingly, Anand Parekh’s Alyeska Investment Group cut the biggest position of the 700 funds monitored by Insider Monkey, worth an estimated $12.8 million in stock. Jim Simons’ fund, Renaissance Technologies, also sold off its stock, about $3.9 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as John Bean Technologies Corp (NYSE:JBT) but similarly valued. We will take a look at RealPage, Inc. (NASDAQ:RP), Wright Medical Group Inc (NASDAQ:WMGI), Exelixis, Inc. (NASDAQ:EXEL), and Northwest Natural Gas Co (NYSE:NWN). This group of stocks’ market valuations are closest to JBT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RP | 26 | 256530 | 7 |
| WMGI | 33 | 657867 | -1 |
| EXEL | 34 | 505946 | 13 |
| NWN | 12 | 53058 | -2 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $368 million. That figure was $84 million in JBT’s case. Exelixis, Inc. (NASDAQ:EXEL) is the most popular stock in this table. On the other hand Northwest Natural Gas Co (NYSE:NWN) is the least popular one with only 12 bullish hedge fund positions. John Bean Technologies Corp (NYSE:JBT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EXEL might be a better candidate to consider taking a long position in.
Disclosure: None
