We at Insider Monkey have gone over 730 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of June 28th. In this article, we look at what those funds think of BlackBerry Limited (NYSE:BB) based on that data.
Is BlackBerry Limited (NYSE:BB) going to take off soon? The best stock pickers are becoming more confident. The number of long hedge fund bets moved up by 2 recently. Our calculations also showed that BB isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s review the new hedge fund action surrounding BlackBerry Limited (NYSE:BB).
What does smart money think about BlackBerry Limited (NYSE:BB)?
At the end of the second quarter, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in BB a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in BlackBerry Limited (NYSE:BB) was held by Fairfax Financial Holdings, which reported holding $348.2 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $45.5 million position. Other investors bullish on the company included Kahn Brothers, Iridian Asset Management, and D E Shaw.
As one would reasonably expect, some big names have been driving this bullishness. Kahn Brothers, managed by Irving Kahn, initiated the most valuable position in BlackBerry Limited (NYSE:BB). Kahn Brothers had $41.5 million invested in the company at the end of the quarter. David Cohen and Harold Levy’s Iridian Asset Management also made a $33.1 million investment in the stock during the quarter. The following funds were also among the new BB investors: Dmitry Balyasny’s Balyasny Asset Management, Paul Hondros’s AlphaOne Capital Partners, and Israel Englander’s Millennium Management.
Let’s also examine hedge fund activity in other stocks similar to BlackBerry Limited (NYSE:BB). These stocks are United States Cellular Corporation (NYSE:USM), PNM Resources, Inc. (NYSE:PNM), Globus Medical Inc (NYSE:GMED), and Equity Commonwealth (NYSE:EQC). This group of stocks’ market valuations resemble BB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| USM | 15 | 177104 | 1 |
| PNM | 13 | 348669 | -1 |
| GMED | 19 | 170998 | -5 |
| EQC | 20 | 196634 | -1 |
| Average | 16.75 | 223351 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $223 million. That figure was $540 million in BB’s case. Equity Commonwealth (NYSE:EQC) is the most popular stock in this table. On the other hand PNM Resources, Inc. (NYSE:PNM) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks BlackBerry Limited (NYSE:BB) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately BB wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on BB were disappointed as the stock returned -29.6% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
