Many investors, including Paul Tudor Jones or Stan Druckenmiller, have been saying before the Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the first half of 2019, most investors recovered all of their Q4 losses as sentiment shifted and optimism dominated the US China trade negotiations. Nevertheless, many of the stocks that delivered strong returns in the first half still sport strong fundamentals and their gains were more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Bruker Corporation (NASDAQ:BRKR) changed recently.
Is Bruker Corporation (NASDAQ:BRKR) ready to rally soon? The best stock pickers are getting more optimistic. The number of long hedge fund bets improved by 2 in recent months. Our calculations also showed that BRKR isn’t among the 30 most popular stocks among hedge funds (see the video below). BRKR was in 27 hedge funds’ portfolios at the end of the second quarter of 2019. There were 25 hedge funds in our database with BRKR 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.
According to most market participants, hedge funds are viewed as unimportant, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading at the moment, Our experts choose to focus on the crème de la crème of this club, around 750 funds. It is estimated that this group of investors preside over bulk of the hedge fund industry’s total asset base, and by watching their highest performing equity investments, Insider Monkey has determined numerous investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s review the new hedge fund action surrounding Bruker Corporation (NASDAQ:BRKR).
What have hedge funds been doing with Bruker Corporation (NASDAQ:BRKR)?
At Q2’s end, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BRKR over the last 16 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Bruker Corporation (NASDAQ:BRKR), which was worth $98.8 million at the end of the second quarter. On the second spot was D E Shaw which amassed $96.1 million worth of shares. Moreover, AQR Capital Management, Millennium Management, and Arrowstreet Capital were also bullish on Bruker Corporation (NASDAQ:BRKR), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, key money managers have been driving this bullishness. McKinley Capital Management, managed by Robert B. Gillam, established the biggest position in Bruker Corporation (NASDAQ:BRKR). McKinley Capital Management had $5.3 million invested in the company at the end of the quarter. Efrem Kamen’s Pura Vida Investments also initiated a $5 million position during the quarter. The other funds with brand new BRKR positions are Ira Unschuld’s Brant Point Investment Management, Dmitry Balyasny’s Balyasny Asset Management, and Ken Griffin’s Citadel Investment Group.
Let’s also examine hedge fund activity in other stocks similar to Bruker Corporation (NASDAQ:BRKR). We will take a look at A. O. Smith Corporation (NYSE:AOS), Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM), Cognex Corporation (NASDAQ:CGNX), and Sensata Technologies Holding plc (NYSE:ST). All of these stocks’ market caps match BRKR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AOS | 22 | 512410 | -5 |
| SQM | 7 | 23441 | -2 |
| CGNX | 13 | 272646 | 0 |
| ST | 21 | 1181343 | 0 |
| Average | 15.75 | 497460 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $497 million. That figure was $521 million in BRKR’s case. A. O. Smith Corporation (NYSE:AOS) is the most popular stock in this table. On the other hand Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Bruker Corporation (NASDAQ:BRKR) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately BRKR wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on BRKR were disappointed as the stock returned -12% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
