The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards BBQ Holdings, Inc. (NASDAQ:BBQ).
BBQ Holdings, Inc. (NASDAQ:BBQ) shareholders have witnessed a decrease in support from the world’s most elite money managers of late. BBQ Holdings, Inc. (NASDAQ:BBQ) was in 4 hedge funds’ portfolios at the end of September. The all time high for this statistics is 5. Our calculations also showed that BBQ isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 S&P 500 ETFs by 66 percentage points since March 2017 (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.
Charles Davidson of Wexford Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s take a peek at the key hedge fund action encompassing BBQ Holdings, Inc. (NASDAQ:BBQ).
What have hedge funds been doing with BBQ Holdings, Inc. (NASDAQ:BBQ)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BBQ over the last 21 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Charles Davidson and Joseph Jacobs’s Wexford Capital has the most valuable position in BBQ Holdings, Inc. (NASDAQ:BBQ), worth close to $5.6 million, comprising 1.5% of its total 13F portfolio. The second largest stake is held by Bandera Partners, led by Gregory Bylinsky and Jefferson Gramm, holding a $4.8 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Renaissance Technologies, Bryant Regan’s Lafitte Capital Management and . In terms of the portfolio weights assigned to each position Bandera Partners allocated the biggest weight to BBQ Holdings, Inc. (NASDAQ:BBQ), around 3.12% of its 13F portfolio. Wexford Capital is also relatively very bullish on the stock, setting aside 1.49 percent of its 13F equity portfolio to BBQ.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified BBQ as a viable investment and initiated a position in the stock.
Let’s also examine hedge fund activity in other stocks similar to BBQ Holdings, Inc. (NASDAQ:BBQ). These stocks are Volt Information Sciences, Inc. (NYSE:VOLT), Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), NovaBay Pharmaceuticals, Inc. (NYSE:NBY), AgeX Therapeutics, Inc. (NYSE:AGE), FreightCar America, Inc. (NASDAQ:RAIL), Ossen Innovation Co Ltd (NASDAQ:OSN), and Seanergy Maritime Holdings Corp. (NASDAQ:SHIP). This group of stocks’ market caps are similar to BBQ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VOLT | 4 | 2261 | 0 |
| WVVI | 1 | 689 | 0 |
| NBY | 2 | 464 | 0 |
| AGE | 3 | 2640 | -3 |
| RAIL | 6 | 2890 | -1 |
| OSN | 1 | 447 | 0 |
| SHIP | 4 | 2479 | 2 |
| Average | 3 | 1696 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $12 million in BBQ’s case. FreightCar America, Inc. (NASDAQ:RAIL) is the most popular stock in this table. On the other hand Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) is the least popular one with only 1 bullish hedge fund positions. BBQ Holdings, Inc. (NASDAQ:BBQ) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BBQ is 58. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on BBQ as the stock returned 37.5% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Bbq Holdings Inc. (NASDAQ:BBQ)
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Disclosure: None. This article was originally published at Insider Monkey.
