The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Baker Hughes Company (NASDAQ:BKR) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Baker Hughes Company (NASDAQ:BKR) a splendid investment now? Investors who are in the know were cutting their exposure. The number of long hedge fund positions were trimmed by 3 lately. Baker Hughes Company (NASDAQ:BKR) was in 37 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. Our calculations also showed that BKR 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. Keeping this in mind we’re going to take a gander at the new hedge fund action surrounding Baker Hughes Company (NASDAQ:BKR).
Richard S. Pzena of Pzena Investment Management
Do Hedge Funds Think BKR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in BKR a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Pzena Investment Management, managed by Richard S. Pzena, holds the largest position in Baker Hughes Company (NASDAQ:BKR). Pzena Investment Management has a $598.7 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which holds a $71.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism comprise David Cohen and Harold Levy’s Iridian Asset Management, Ken Griffin’s Citadel Investment Group and Todd J. Kantor’s Encompass Capital Advisors. In terms of the portfolio weights assigned to each position AltraVue Capital allocated the biggest weight to Baker Hughes Company (NASDAQ:BKR), around 3.46% of its 13F portfolio. Encompass Capital Advisors is also relatively very bullish on the stock, earmarking 2.59 percent of its 13F equity portfolio to BKR.
Since Baker Hughes Company (NASDAQ:BKR) has experienced a decline in interest from hedge fund managers, we can see that there is a sect of hedge funds that elected to cut their full holdings in the third quarter. Interestingly, Clint Carlson’s Carlson Capital dropped the biggest investment of all the hedgies tracked by Insider Monkey, valued at close to $10.3 million in stock. Mark Kingdon’s fund, Kingdon Capital, also dumped its stock, about $9.3 million worth. These moves are interesting, as total hedge fund interest fell by 3 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Baker Hughes Company (NASDAQ:BKR) but similarly valued. We will take a look at W.W. Grainger, Inc. (NYSE:GWW), Live Nation Entertainment, Inc. (NYSE:LYV), Ingersoll Rand Inc. (NYSE:IR), Steris Plc (NYSE:STE), The Cooper Companies, Inc. (NYSE:COO), Regions Financial Corporation (NYSE:RF), and The Clorox Company (NYSE:CLX). This group of stocks’ market caps are closest to BKR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GWW | 28 | 306060 | -1 |
| LYV | 47 | 1308167 | 7 |
| IR | 33 | 732834 | 2 |
| STE | 34 | 1733011 | -1 |
| COO | 37 | 1403322 | 4 |
| RF | 28 | 204669 | -5 |
| CLX | 34 | 971875 | -3 |
| Average | 34.4 | 951420 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.4 hedge funds with bullish positions and the average amount invested in these stocks was $951 million. That figure was $1014 million in BKR’s case. Live Nation Entertainment, Inc. (NYSE:LYV) is the most popular stock in this table. On the other hand W.W. Grainger, Inc. (NYSE:GWW) is the least popular one with only 28 bullish hedge fund positions. Baker Hughes Company (NASDAQ:BKR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BKR is 52.1. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on BKR as the stock returned 11.8% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Baker Hughes Co (NYSE:BKR)
Follow Baker Hughes Co (NYSE:BKR)
Suggested Articles:
- 30 Best Places To Visit in USA in May
- 10 Best Cryptocurrency Startups to Watch
- 15 Best Technology Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
