How Smart Money Is Trading BWX Technologies Inc (BWXT)?

Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. Between November 1, 2014 and October 30 of this year, less than 49% of the stocks in the S&P 500 beat the market. However, hedge funds’ top 30 stock picks from the index had a much higher success rate than this, at 63%. The returns of these 30 stocks also easily bested the broader market, at 9.5% compared to 5.2%, despite there being a few duds like Micron and Anadarko (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.

BWX Technologies Inc (NYSE:BWXT) investors should be aware of an increase in support from the world’s most elite money managers recently. BWX Technologies Inc (NYSE:BWXT) was in 26 hedge funds’ portfolios at the end of the third quarter of 2015. There were 14 hedge funds in our database with BWX Technologies Inc (NYSE:BWXT) 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 Jack in the Box Inc. (NASDAQ:JACK), Aspen Insurance Holdings Limited (NYSE:AHL), and Telecom Argentina SA (ADR) (NYSE:TEO) to gather more data points.

According to most traders, hedge funds are seen as worthless, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, our researchers hone in on the upper echelon of this club, around 700 funds. Most estimates calculate that this group of people shepherd most of the hedge fund industry’s total capital, and by tailing their matchless investments, Insider Monkey has determined a few investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, we’re going to analyze the latest action regarding BWX Technologies Inc (NYSE:BWXT).

How are hedge funds trading BWX Technologies Inc (NYSE:BWXT)?

At the end of Q3, a total of 26 of the hedge funds tracked by Insider Monkey were long in this stock, an increase 86% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Clifton S. Robbins’ Blue Harbour Group has the largest position in BWX Technologies Inc (NYSE:BWXT), worth close to $278.4 million, corresponding to 8.7% of its total 13F portfolio. On Blue Harbour Group’s heels is Cardinal Capital, led by Amy Minella, holding a $51.5 million position; 3.2% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, D E Shaw and Clint Carlson’s Carlson Capital.

Consequently, specific money managers have jumped into BWX Technologies Inc (NYSE:BWXT) headfirst. The following funds were among the new BWX Technologies Inc (NYSE:BWXT) investors: First Pacific Advisors LLC, D E Shaw, and Cliff Asness’ AQR Capital Management.

Let’s check out hedge fund activity in other stocks similar to BWX Technologies Inc (NYSE:BWXT). These stocks are Jack in the Box Inc. (NASDAQ:JACK), Aspen Insurance Holdings Limited (NYSE:AHL), Telecom Argentina S.A. (ADR) (NYSE:TEO), and CVR Refining LP (NYSE: CVRR). All of these stocks’ market caps resemble BWX Technologies Inc (NYSE:BWXT)’s market cap.

As you can see, these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $145 million, while the most popular among them is Jack in the Box Inc. (NASDAQ:JACK) with 27 long positions. BWX Technologies is slightly behind in terms of the number of bullish funds. However, the fact that the company registered a boost in popularity among smart money investors in the third quarter and the $560 million aggregate value of holdings owned by these funds, suggests that BWX might be a good pick for your portfolio and is worth a more in-depth analysis.