Will the new coronavirus cause a recession in US in the next 6 months? On February 27th, we put the probability at 75% and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Hasbro, Inc. (NASDAQ:HAS).
Hasbro, Inc. (NASDAQ:HAS) investors should pay attention to an increase in enthusiasm from smart money of late. HAS was in 36 hedge funds’ portfolios at the end of the fourth quarter of 2019. There were 32 hedge funds in our database with HAS positions at the end of the previous quarter. Our calculations also showed that HAS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by more than 41 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 35.3% through March 3rd. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Tom Gayner of Markel Gayner Asset Management
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s analyze the new hedge fund action regarding Hasbro, Inc. (NASDAQ:HAS).
Hedge fund activity in Hasbro, Inc. (NASDAQ:HAS)
Heading into the first quarter of 2020, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HAS over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, AQR Capital Management was the largest shareholder of Hasbro, Inc. (NASDAQ:HAS), with a stake worth $120 million reported as of the end of September. Trailing AQR Capital Management was Point72 Asset Management, which amassed a stake valued at $56.4 million. Citadel Investment Group, Holocene Advisors, and Markel Gayner 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 BeaconLight Capital allocated the biggest weight to Hasbro, Inc. (NASDAQ:HAS), around 3.19% of its 13F portfolio. Sabrepoint Capital is also relatively very bullish on the stock, designating 2.8 percent of its 13F equity portfolio to HAS.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, established the largest position in Hasbro, Inc. (NASDAQ:HAS). Point72 Asset Management had $56.4 million invested in the company at the end of the quarter. Renaissance Technologies also made a $29.3 million investment in the stock during the quarter. The following funds were also among the new HAS investors: Benjamin A. Smith’s Laurion Capital Management, Donald Sussman’s Paloma Partners, and Jack Woodruff’s Candlestick Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hasbro, Inc. (NASDAQ:HAS) but similarly valued. We will take a look at Citrix Systems, Inc. (NASDAQ:CTXS), CenturyLink, Inc. (NYSE:CTL), Quest Diagnostics Incorporated (NYSE:DGX), and MarketAxess Holdings Inc. (NASDAQ:MKTX). This group of stocks’ market caps resemble HAS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTXS | 34 | 1513753 | 3 |
| CTL | 34 | 1144168 | 2 |
| DGX | 31 | 433283 | -5 |
| MKTX | 27 | 636917 | 1 |
| Average | 31.5 | 932030 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $932 million. That figure was $523 million in HAS’s case. Citrix Systems, Inc. (NASDAQ:CTXS) is the most popular stock in this table. On the other hand MarketAxess Holdings Inc. (NASDAQ:MKTX) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Hasbro, Inc. (NASDAQ:HAS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 22.3% in 2020 through March 16th and still beat the market by 3.2 percentage points. Unfortunately HAS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HAS were disappointed as the stock returned -57.4% during the first two and a half months of 2020 (through March 16th) 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 most of these stocks already outperformed the market in Q1.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
