Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about BCE Inc. (USA) (NYSE:BCE).
BCE Inc. (USA) (NYSE:BCE) registered an increase in popularity among smart money investors tracked by Insider Monkey during the third quarter. At the end of September, 16 funds held long positions in BCE, down by one over the quarter. However, 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 Infosys Ltd ADR (NYSE:INFY), Bank of Montreal (USA) (NYSE:BMO), and FedEx Corporation (NYSE:FDX) to gather more data points.
Follow Bce Inc (NYSE:BCE)
Follow Bce Inc (NYSE:BCE)
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.
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With all of this in mind, let’s take a peek at the latest action encompassing BCE Inc. (USA) (NYSE:BCE).
What does the smart money think about BCE Inc. (USA) (NYSE:BCE)?
Heading into the fourth quarter of 2016, 16 funds tracked by Insider Monkey were long BCE, which represnts a rise of 7% from the second quarter of 2016. On the other hand, there were a total of 14 hedge funds with a bullish position in BCE at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Cliff Asness’ AQR Capital Management has the number one position in BCE Inc. (USA) (NYSE:BCE), worth close to $88.4 million. Coming in second is Jim Simons’ Renaissance Technologies holding a $33.3 million position. Some other members of the smart money that hold long positions include Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors. 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 money managers were breaking ground themselves. Michael Platt and William Reeves’ BlueCrest Capital Mgmt. established the biggest position in BCE Inc. (USA) (NYSE:BCE) which invested $7.8 million in the company at the end of the quarter. Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors also initiated a $1.1 million position during the quarter. The only other fund with a brand new BCE position is Robert B. Gillam’s McKinley Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to BCE Inc. (USA) (NYSE:BCE). We will take a look at Infosys Ltd ADR (NYSE:INFY), Bank of Montreal (USA) (NYSE:BMO), FedEx Corporation (NYSE:FDX), and PNC Financial Services (NYSE:PNC). This group of stocks’ market values resemble BCE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INFY | 20 | 822886 | -3 |
| BMO | 16 | 219051 | 1 |
| FDX | 49 | 4031572 | 3 |
| PNC | 51 | 1891503 | 6 |
As you can see these stocks had an average of 34 funds with bullish positions and the average amount invested in these stocks was $1.74 billion. That figure was just $190 million in BCE’s case. PNC Financial Services (NYSE:PNC) is the most popular stock in this table. On the other hand Bank of Montreal (USA) (NYSE:BMO) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks BCE Inc. (USA) (NYSE:BCE) is even less popular than Bank of Montreal (USA) (NYSE:BMO). 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.
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