Many investors, including Paul Tudor Jones or Stan Druckenmiller, have been saying before 2018’s Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the first half of 2019, most investors recovered all of their Q4 losses as sentiment shifted and optimism dominated the US China trade negotiations. Nevertheless, many of the stocks that delivered strong returns in the first half still sport strong fundamentals and their gains were more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Hasbro, Inc. (NASDAQ:HAS) changed recently.
Is Hasbro, Inc. (NASDAQ:HAS) a buy, sell, or hold? The smart money is taking a bullish view. The number of bullish hedge fund bets inched up by 5 lately. Our calculations also showed that HAS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings). HAS was in 29 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with HAS positions at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Tom Gayner of Markel Gayner Asset Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock is still extremely cheap despite already gaining 20 percent. With all of this in mind we’re going to take a peek at the recent hedge fund action regarding Hasbro, Inc. (NASDAQ:HAS).
How are hedge funds trading Hasbro, Inc. (NASDAQ:HAS)?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the second quarter of 2019. On the other hand, there were a total of 20 hedge funds with a bullish position in HAS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, AQR Capital Management held the most valuable stake in Hasbro, Inc. (NASDAQ:HAS), which was worth $89.6 million at the end of the third quarter. On the second spot was Balyasny Asset Management which amassed $54.5 million worth of shares. Melvin Capital Management, Markel Gayner Asset Management, and Citadel Investment Group 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 Sabrepoint Capital allocated the biggest weight to Hasbro, Inc. (NASDAQ:HAS), around 4.76% of its 13F portfolio. BeaconLight Capital is also relatively very bullish on the stock, earmarking 4.74 percent of its 13F equity portfolio to HAS.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Melvin Capital Management, managed by Gabriel Plotkin, established the most valuable position in Hasbro, Inc. (NASDAQ:HAS). Melvin Capital Management had $44.5 million invested in the company at the end of the quarter. David E. Shaw’s D E Shaw also initiated a $21.3 million position during the quarter. The other funds with new positions in the stock are Principal Global Investors’s Columbus Circle Investors, Brandon Haley’s Holocene Advisors, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Hasbro, Inc. (NASDAQ:HAS) but similarly valued. These stocks are Akamai Technologies, Inc. (NASDAQ:AKAM), Twilio Inc. (NYSE:TWLO), Conagra Brands, Inc. (NYSE:CAG), and Waters Corporation (NYSE:WAT). All of these stocks’ market caps match HAS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AKAM | 27 | 810658 | -6 |
| TWLO | 59 | 2259864 | -4 |
| CAG | 27 | 681948 | 3 |
| WAT | 25 | 595467 | -1 |
| Average | 34.5 | 1086984 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.5 hedge funds with bullish positions and the average amount invested in these stocks was $1087 million. That figure was $432 million in HAS’s case. Twilio Inc. (NYSE:TWLO) is the most popular stock in this table. On the other hand Waters Corporation (NYSE:WAT) is the least popular one with only 25 bullish hedge fund positions. Hasbro, Inc. (NASDAQ:HAS) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. A small number of hedge funds were also right about betting on HAS, though not to the same extent, as the stock returned 33.4% in 2019 and surpassed the market.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
