Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 15 S&P 500 stocks among hedge funds at the end of September 2018 returned an average of 1% through March 15th whereas the S&P 500 Index ETF lost 2.2% during the same period. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Brookline Bancorp, Inc. (NASDAQ:BRKL) from the perspective of those elite funds.
Is Brookline Bancorp, Inc. (NASDAQ:BRKL) the right pick for your portfolio? The best stock pickers are taking a bullish view. The number of bullish hedge fund positions improved by 4 recently. Our calculations also showed that brkl isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s review the latest hedge fund action regarding Brookline Bancorp, Inc. (NASDAQ:BRKL).
What have hedge funds been doing with Brookline Bancorp, Inc. (NASDAQ:BRKL)?
At Q4’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BRKL over the last 14 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Brookline Bancorp, Inc. (NASDAQ:BRKL) was held by Renaissance Technologies, which reported holding $23.5 million worth of stock at the end of December. It was followed by Polaris Capital Management with a $15.3 million position. Other investors bullish on the company included Royce & Associates, Marshall Wace LLP, and D E Shaw.
As one would reasonably expect, key hedge funds have jumped into Brookline Bancorp, Inc. (NASDAQ:BRKL) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most outsized position in Brookline Bancorp, Inc. (NASDAQ:BRKL). Marshall Wace LLP had $3.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.6 million position during the quarter. The only other fund with a new position in the stock is Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Brookline Bancorp, Inc. (NASDAQ:BRKL) but similarly valued. These stocks are Arco Platform Limited (NASDAQ:ARCE), TIER REIT, Inc. (NYSE:TIER), Pitney Bowes Inc. (NYSE:PBI), and National Research Corporation (NASDAQ:NRC). This group of stocks’ market caps are similar to BRKL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARCE | 10 | 31773 | -12 |
| TIER | 7 | 71133 | -2 |
| PBI | 20 | 78677 | -2 |
| NRC | 5 | 32066 | -1 |
| Average | 10.5 | 53412 | -4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $50 million in BRKL’s case. Pitney Bowes Inc. (NYSE:PBI) is the most popular stock in this table. On the other hand National Research Corporation (NASDAQ:NRC) is the least popular one with only 5 bullish hedge fund positions. Brookline Bancorp, Inc. (NASDAQ:BRKL) is not the least popular stock in this group but hedge fund interest is still below average. 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately BRKL wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); BRKL investors were disappointed as the stock returned 5.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
