Here is What Hedge Funds Think About BMC Stock Holdings Inc (BMCH)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards BMC Stock Holdings Inc (NASDAQ:BMCH).

Is BMC Stock Holdings Inc (NASDAQ:BMCH) the right investment to pursue these days? Prominent investors are undoubtedly becoming more confident. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings moved up by 5 in recent months. BMCH was in 25 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with BMCH holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as RMR Group Inc(NASDAQ:RMR), GasLog Ltd (NYSE:GLOG), and Atkore International Group Inc(NYSE:ATKR) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How have hedgies been trading BMC Stock Holdings Inc (NASDAQ:BMCH)?

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 25% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards BMCH over the last 5 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, MFP Investors, led by Michael Price, holds the largest position in BMC Stock Holdings Inc (NASDAQ:BMCH). MFP Investors has a $60.6 million position in the stock, comprising 8.1% of its 13F portfolio. The second largest stake is held by Odey Asset Management Group, led by Crispin Odey, holding a $43.6 million position; 3.1% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions contain Richard S. Meisenberg’s ACK Asset Management, D. E. Shaw’s D E Shaw and Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management. We should note that MFP Investors is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As one would reasonably expect, specific money managers have been driving this bullishness. Marshall Wace LLP, led by Paul Marshall and Ian Wace, assembled the most valuable position in BMC Stock Holdings Inc (NASDAQ:BMCH). Marshall Wace LLP had $7.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $3.1 million position during the quarter. The following funds were also among the new BMCH investors: Leon Cooperman’s Omega Advisors, David Rodriguez-Fraile’s BlueMar Capital Management, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s also examine hedge fund activity in other stocks similar to BMC Stock Holdings Inc (NASDAQ:BMCH). These stocks are RMR Group Inc(NASDAQ:RMR), GasLog Ltd (NYSE:GLOG), Atkore International Group Inc(NYSE:ATKR), and Agree Realty Corporation (NYSE:ADC). This group of stocks’ market values match BMCH’s market value.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $240 million in BMCH’s case. Agree Realty Corporation (NYSE:ADC) is the most popular stock in this table. On the other hand GasLog Ltd (NYSE:GLOG) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks BMC Stock Holdings Inc (NASDAQ:BMCH) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None