Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
BBVA Banco Frances S.A. (ADR) (NYSE:BFR) investors should pay attention to an increase in hedge fund sentiment lately. BFR was in 11 hedge funds’ portfolios at the end of September. There were 10 hedge funds in our database with BFR positions at the end of the previous quarter. At the end of this article we will also compare BFR to other stocks including Gulfport Energy Corporation (NASDAQ:GPOR), Post Properties Inc (NYSE:PPS), and NRG Energy Inc (NYSE:NRG) to get a better sense of its popularity.
Follow Banco Bbva Argentina S.a. (NYSE:BBAR)
Follow Banco Bbva Argentina S.a. (NYSE:BBAR)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
wrangler/Shutterstock.com
With all of this in mind, we’re going to take a peek at the latest action encompassing BBVA Banco Frances S.A. (ADR) (NYSE:BFR).
What have hedge funds been doing with BBVA Banco Frances S.A. (ADR) (NYSE:BFR)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards BFR over the last 5 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, EMS Capital, led by Edmond M. Safra, holds the number one position in BBVA Banco Frances S.A. (ADR) (NYSE:BFR). EMS Capital has a $17.8 million position in the stock, comprising 1.8% of its 13F portfolio. On EMS Capital’s heels is Point State Capital, led by Zach Schreiber, holding a $13.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Millennium Management, one of the biggest hedge funds in the world, and Crispin Odey’s Odey Asset Management Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, key hedge funds were leading the bulls’ herd. Ellington, led by Mike Vranos, assembled the most outsized position in BBVA Banco Frances S.A. (ADR) (NYSE:BFR). Ellington had $0.4 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $0.2 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BBVA Banco Frances S.A. (ADR) (NYSE:BFR) but similarly valued. These stocks are Gulfport Energy Corporation (NASDAQ:GPOR), Post Properties Inc (NYSE:PPS), NRG Energy Inc (NYSE:NRG), and First Horizon National Corporation (NYSE:FHN). All of these stocks’ market caps resemble BFR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GPOR | 34 | 816426 | -6 |
| PPS | 13 | 273165 | -6 |
| NRG | 31 | 331194 | 6 |
| FHN | 17 | 262442 | -3 |
As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $421 million. That figure was $53 million in BFR’s case. Gulfport Energy Corporation (NASDAQ:GPOR) is the most popular stock in this table. On the other hand Post Properties Inc (NYSE:PPS) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks BBVA Banco Frances S.A. (ADR) (NYSE:BFR) is even less popular than PPS. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Suggested Articles:
Countries With The Best Gun Laws
Fun Activities For Work Parties
Biggest Fertilizer Companies In The World
Disclosure: None
