Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Brighthouse Financial, Inc. (NASDAQ:BHF) in this article.
Brighthouse Financial, Inc. (NASDAQ:BHF) was in 23 hedge funds’ portfolios at the end of June. BHF shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. There were 31 hedge funds in our database with BHF positions at the end of the previous quarter. Our calculations also showed that BHF isn’t among the 30 most popular stocks among hedge funds (view the video below).
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 assumed to be underperforming, old investment tools of the past. While there are over 8000 funds in operation at present, We look at the aristocrats of this group, around 750 funds. These money managers manage bulk of the hedge fund industry’s total capital, and by paying attention to their inimitable equity investments, Insider Monkey has deciphered many investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points per annum 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 former hedge manager, Dr. Steve Sjuggerud, 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 take a look at the fresh hedge fund action regarding Brighthouse Financial, Inc. (NASDAQ:BHF).
How have hedgies been trading Brighthouse Financial, Inc. (NASDAQ:BHF)?
Heading into the third quarter of 2019, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -26% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BHF over the last 16 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in Brighthouse Financial, Inc. (NASDAQ:BHF) was held by Greenlight Capital, which reported holding $120.8 million worth of stock at the end of March. It was followed by Miller Value Partners with a $84.1 million position. Other investors bullish on the company included Diamond Hill Capital, AQR Capital Management, and East Side Capital (RR Partners).
Judging by the fact that Brighthouse Financial, Inc. (NASDAQ:BHF) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers that decided to sell off their positions entirely heading into Q3. Interestingly, Mike Masters’s Masters Capital Management said goodbye to the biggest investment of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $54.4 million in stock. Jeffrey Talpins’s fund, Element Capital Management, also sold off its stock, about $7.5 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 8 funds heading into Q3.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Brighthouse Financial, Inc. (NASDAQ:BHF) but similarly valued. We will take a look at Stifel Financial Corp. (NYSE:SF), Viper Energy Partners LP (NASDAQ:VNOM), Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL), and Ryman Hospitality Properties, Inc. (NYSE:RHP). This group of stocks’ market caps are closest to BHF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SF | 15 | 160961 | -1 |
| VNOM | 13 | 160127 | -4 |
| CBRL | 22 | 201300 | -1 |
| RHP | 21 | 407514 | 3 |
| Average | 17.75 | 232476 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $232 million. That figure was $417 million in BHF’s case. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) is the most popular stock in this table. On the other hand Viper Energy Partners LP (NASDAQ:VNOM) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Brighthouse Financial, Inc. (NASDAQ:BHF) 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. Hedge funds were also right about betting on BHF as the stock returned 10.3% during Q3 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
