We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Bloomin’ Brands Inc (NASDAQ:BLMN).
Bloomin’ Brands Inc (NASDAQ:BLMN) was in 32 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BLMN has seen an increase in enthusiasm from smart money recently. There were 24 hedge funds in our database with BLMN holdings at the end of December. Our calculations also showed that BLMN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Today there are a large number of metrics market participants use to size up stocks. Two of the most innovative metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best money managers can outperform the market by a superb margin (see the details here). 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 .
Noam Gottesman of GLG Partners
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. Keeping this in mind we’re going to take a glance at the latest hedge fund action encompassing Bloomin’ Brands Inc (NASDAQ:BLMN).
Do Hedge Funds Think BLMN Is A Good Stock To Buy Now?
At first quarter’s end, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in BLMN over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of Bloomin’ Brands Inc (NASDAQ:BLMN), with a stake worth $73.5 million reported as of the end of March. Trailing Arrowstreet Capital was Tremblant Capital, which amassed a stake valued at $68.7 million. Citadel Investment Group, GLG Partners, and Scopus Asset 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 Clearfield Capital allocated the biggest weight to Bloomin’ Brands Inc (NASDAQ:BLMN), around 8.71% of its 13F portfolio. Isomer Partners is also relatively very bullish on the stock, designating 5.75 percent of its 13F equity portfolio to BLMN.
Consequently, specific money managers were leading the bulls’ herd. Tremblant Capital, managed by Brett Barakett, assembled the most outsized position in Bloomin’ Brands Inc (NASDAQ:BLMN). Tremblant Capital had $68.7 million invested in the company at the end of the quarter. Mendel Hui’s Isomer Partners also initiated a $23 million position during the quarter. The other funds with brand new BLMN positions are Keith Meister’s Corvex Capital, Dmitry Balyasny’s Balyasny Asset Management, and Leon Shaulov’s Maplelane Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Bloomin’ Brands Inc (NASDAQ:BLMN) but similarly valued. We will take a look at Telecom Argentina S.A. (NYSE:TEO), Flagstar Bancorp Inc (NYSE:FBC), CryoPort, Inc. (NASDAQ:CYRX), Cubic Corporation (NYSE:CUB), WSFS Financial Corporation (NASDAQ:WSFS), Mueller Industries, Inc. (NYSE:MLI), and Ultra Clean Holdings Inc (NASDAQ:UCTT). This group of stocks’ market valuations are closest to BLMN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEO | 9 | 23425 | 3 |
| FBC | 28 | 276650 | 0 |
| CYRX | 20 | 129372 | -1 |
| CUB | 31 | 454987 | 18 |
| WSFS | 10 | 87691 | -3 |
| MLI | 20 | 249631 | 1 |
| UCTT | 17 | 189267 | -4 |
| Average | 19.3 | 201575 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $202 million. That figure was $498 million in BLMN’s case. Cubic Corporation (NYSE:CUB) is the most popular stock in this table. On the other hand Telecom Argentina S.A. (NYSE:TEO) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Bloomin’ Brands Inc (NASDAQ:BLMN) is more popular among hedge funds. Our overall hedge fund sentiment score for BLMN is 90. 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Unfortunately BLMN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BLMN were disappointed as the stock returned 0.6% since the end of the first quarter (through 7/2) 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 since 2019.
Follow Bloomin' Brands Inc. (NASDAQ:BLMN)
Follow Bloomin' Brands Inc. (NASDAQ:BLMN)
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Disclosure: None. This article was originally published at Insider Monkey.
