The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded The Boston Beer Company Inc (NYSE:SAM) and determine whether the smart money was really smart about this stock.
The Boston Beer Company Inc (NYSE:SAM) was in 32 hedge funds’ portfolios at the end of June. The all time high for this statistics is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. SAM investors should be aware of an increase in support from the world’s most elite money managers of late. There were 24 hedge funds in our database with SAM positions at the end of the first quarter. Our calculations also showed that SAM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a look at the latest hedge fund action encompassing The Boston Beer Company Inc (NYSE:SAM).
How are hedge funds trading The Boston Beer Company Inc (NYSE:SAM)?
At Q2’s end, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the first quarter of 2020. By comparison, 23 hedge funds held shares or bullish call options in SAM a year ago. 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, Renaissance Technologies was the largest shareholder of The Boston Beer Company Inc (NYSE:SAM), with a stake worth $259.7 million reported as of the end of September. Trailing Renaissance Technologies was Marshall Wace LLP, which amassed a stake valued at $89 million. Fisher Asset Management, Millennium Management, and GLG Partners 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 Kehrs Ridge Capital allocated the biggest weight to The Boston Beer Company Inc (NYSE:SAM), around 4.23% of its 13F portfolio. Atreides Management is also relatively very bullish on the stock, designating 3.84 percent of its 13F equity portfolio to SAM.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into The Boston Beer Company Inc (NYSE:SAM) headfirst. Scopus Asset Management, managed by Alexander Mitchell, assembled the most valuable position in The Boston Beer Company Inc (NYSE:SAM). Scopus Asset Management had $37.6 million invested in the company at the end of the quarter. Jack Woodruff’s Candlestick Capital Management also made a $30.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Gavin Baker’s Atreides Management, Donald Sussman’s Paloma Partners, and Brian Scudieri’s Kehrs Ridge Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as The Boston Beer Company Inc (NYSE:SAM) but similarly valued. These stocks are Lear Corporation (NYSE:LEA), Bausch Health Companies (NYSE:BHC), Kingsoft Cloud Holdings Limited (NASDAQ:KC), Repligen Corporation (NASDAQ:RGEN), GrubHub Inc (NYSE:GRUB), Federal Realty Investment Trust (NYSE:FRT), and Plains All American Pipeline, L.P. (NYSE:PAA). This group of stocks’ market values resemble SAM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LEA | 41 | 896134 | 13 |
| BHC | 35 | 1745572 | 0 |
| KC | 20 | 62450 | 20 |
| RGEN | 34 | 688852 | 13 |
| GRUB | 52 | 1080219 | 20 |
| FRT | 20 | 76045 | -4 |
| PAA | 9 | 65144 | 1 |
| Average | 30.1 | 659202 | 9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.1 hedge funds with bullish positions and the average amount invested in these stocks was $659 million. That figure was $804 million in SAM’s case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NYSE:PAA) is the least popular one with only 9 bullish hedge fund positions. The Boston Beer Company Inc (NYSE:SAM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SAM is 66.7. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and still beat the market by 17.6 percentage points. Hedge funds were also right about betting on SAM as the stock returned 61.3% during Q3 (through September 14th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
