The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Barclays PLC (NYSE:BCS).
Is Barclays PLC (NYSE:BCS) the right investment to pursue these days? Hedge funds are taking a bullish view. The number of bullish hedge fund bets moved up by 3 recently. Our calculations also showed that BCS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). BCS was in 15 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with BCS holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Boykin Curry of Eagle Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the recent hedge fund action regarding Barclays PLC (NYSE:BCS).
Hedge fund activity in Barclays PLC (NYSE:BCS)
Heading into the fourth quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the previous quarter. By comparison, 11 hedge funds held shares or bullish call options in BCS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Eagle Capital Management, managed by Boykin Curry, holds the biggest position in Barclays PLC (NYSE:BCS). Eagle Capital Management has a $87.2 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $20.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions comprise Renaissance Technologies, Brian Gaines’s Springhouse Capital Management and Peter S. Stamos’s Stamos Capital. In terms of the portfolio weights assigned to each position Springhouse Capital Management allocated the biggest weight to Barclays PLC (NYSE:BCS), around 3.9% of its 13F portfolio. Stamos Capital is also relatively very bullish on the stock, earmarking 1.19 percent of its 13F equity portfolio to BCS.
As industrywide interest jumped, specific money managers have been driving this bullishness. Springhouse Capital Management, managed by Brian Gaines, established the most valuable position in Barclays PLC (NYSE:BCS). Springhouse Capital Management had $5.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.6 million position during the quarter. The other funds with brand new BCS positions are David E. Shaw’s D E Shaw, Dmitry Balyasny’s Balyasny Asset Management, and Mike Vranos’s Ellington.
Let’s check out hedge fund activity in other stocks similar to Barclays PLC (NYSE:BCS). These stocks are Canadian Natural Resources Limited (NYSE:CNQ), Monster Beverage Corp (NASDAQ:MNST), Tyson Foods, Inc. (NYSE:TSN), and Public Service Enterprise Group Incorporated (NYSE:PEG). All of these stocks’ market caps match BCS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNQ | 32 | 558227 | 8 |
| MNST | 34 | 2641322 | -4 |
| TSN | 48 | 1716693 | 9 |
| PEG | 18 | 838718 | -5 |
| Average | 33 | 1438740 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1439 million. That figure was $132 million in BCS’s case. Tyson Foods, Inc. (NYSE:TSN) is the most popular stock in this table. On the other hand Public Service Enterprise Group Incorporated (NYSE:PEG) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Barclays PLC (NYSE:BCS) is even less popular than PEG. Hedge funds clearly dropped the ball on BCS as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on BCS as the stock returned 20% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
