Here is What Hedge Funds Think About Best Buy Co., Inc. (BBY)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Best Buy Co., Inc. (NYSE:BBY).

Is Best Buy Co., Inc. (NYSE:BBY) the right investment to pursue these days? Investors who are in the know were in a bullish mood. The number of bullish hedge fund positions inched up by 2 in recent months. Best Buy Co., Inc. (NYSE:BBY) was in 29 hedge funds’ portfolios at the end of September. The all time high for this statistic is 40. Our calculations also showed that BBY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to take a look at the key hedge fund action encompassing Best Buy Co., Inc. (NYSE:BBY).

Ken Griffin of Citadel Investment Group

Do Hedge Funds Think BBY Is A Good Stock To Buy Now?

At third quarter’s end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards BBY over the last 25 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

More specifically, AQR Capital Management was the largest shareholder of Best Buy Co., Inc. (NYSE:BBY), with a stake worth $176.9 million reported as of the end of September. Trailing AQR Capital Management was Citadel Investment Group, which amassed a stake valued at $147 million. Citadel Investment Group, Renaissance Technologies, and Millennium 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 L2 Asset Management allocated the biggest weight to Best Buy Co., Inc. (NYSE:BBY), around 2.11% of its 13F portfolio. Alyeska Investment Group is also relatively very bullish on the stock, designating 0.6 percent of its 13F equity portfolio to BBY.

As industrywide interest jumped, some big names were breaking ground themselves. Armistice Capital, managed by Steven Boyd, initiated the most valuable position in Best Buy Co., Inc. (NYSE:BBY). Armistice Capital had $34.3 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $18.5 million investment in the stock during the quarter. The other funds with brand new BBY positions are Michael Gelband’s ExodusPoint Capital, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Best Buy Co., Inc. (NYSE:BBY) but similarly valued. We will take a look at Interactive Brokers Group, Inc. (NASDAQ:IBKR), Energy Transfer L.P. (NYSE:ET), ONEOK, Inc. (NYSE:OKE), Generac Holdings Inc. (NYSE:GNRC), Consolidated Edison, Inc. (NYSE:ED), Albemarle Corporation (NYSE:ALB), and ViacomCBS Inc. (NASDAQ:VIAC). This group of stocks’ market valuations resemble BBY’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.7 hedge funds with bullish positions and the average amount invested in these stocks was $713 million. That figure was $680 million in BBY’s case. ViacomCBS Inc. (NASDAQ:VIAC) is the most popular stock in this table. On the other hand ONEOK, Inc. (NYSE:OKE) is the least popular one with only 18 bullish hedge fund positions. Best Buy Co., Inc. (NYSE:BBY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BBY is 40.7. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately BBY wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BBY investors were disappointed as the stock returned 1.1% since the end of September (through 11/30) 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 in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.