Is BHE A Good Stock To Buy Now?

In this article we will analyze whether Benchmark Electronics, Inc. (NYSE:BHE) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is BHE a good stock to buy now? Benchmark Electronics, Inc. (NYSE:BHE) investors should pay attention to a decrease in hedge fund sentiment in recent months. Benchmark Electronics, Inc. (NYSE:BHE) was in 10 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 20. There were 14 hedge funds in our database with BHE positions at the end of the second quarter. Our calculations also showed that BHE 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.

To most traders, hedge funds are seen as worthless, old financial tools of years past. While there are more than 8000 funds trading at present, Our experts choose to focus on the elite of this club, around 850 funds. Most estimates calculate that this group of people handle most of the hedge fund industry’s total capital, and by keeping track of their highest performing equity investments, Insider Monkey has deciphered several investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

John Overdeck of Two Sigma Advisors

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 15 best blue chip stocks 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. Keeping this in mind we’re going to take a glance at the latest hedge fund action surrounding Benchmark Electronics, Inc. (NYSE:BHE).

Do Hedge Funds Think BHE Is A Good Stock To Buy Now?

At the end of September, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BHE over the last 21 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies has the largest position in Benchmark Electronics, Inc. (NYSE:BHE), worth close to $10.1 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which holds a $6.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Cliff Asness’s AQR Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Paul Tudor Jones’s Tudor Investment Corp. In terms of the portfolio weights assigned to each position AlphaCrest Capital Management allocated the biggest weight to Benchmark Electronics, Inc. (NYSE:BHE), around 0.03% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to BHE.

Since Benchmark Electronics, Inc. (NYSE:BHE) has faced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedge funds that elected to cut their entire stakes in the third quarter. Interestingly, Michael Gelband’s ExodusPoint Capital said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth about $1.2 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also said goodbye to its stock, about $0.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Benchmark Electronics, Inc. (NYSE:BHE). We will take a look at Agenus Inc (NASDAQ:AGEN), Standex International Corp. (NYSE:SXI), TriCo Bancshares (NASDAQ:TCBK), Tucows Inc. (NASDAQ:TCX), Meridian Bioscience, Inc. (NASDAQ:VIVO), Armada Hoffler Properties Inc (NYSE:AHH), and Vaxart, Inc. (NASDAQ:VXRT). This group of stocks’ market values match BHE’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $22 million in BHE’s case. Meridian Bioscience, Inc. (NASDAQ:VIVO) is the most popular stock in this table. On the other hand Tucows Inc. (NASDAQ:TCX) is the least popular one with only 8 bullish hedge fund positions. Benchmark Electronics, Inc. (NYSE:BHE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BHE is 25.1. 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 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on BHE as the stock returned 28.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.