How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Blackrock Capital Investment Corp (NASDAQ:BKCC).
Blackrock Capital Investment Corp (NASDAQ:BKCC) investors should pay attention to an increase in hedge fund interest in recent months. 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 Cellectis SA (ADR) (NASDAQ:CLLS), CIRCOR International, Inc. (NYSE:CIR), and Transocean Partners LLC (NYSE:RIGP) to gather more data points.
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Keeping this in mind, we’re going to go over the fresh action regarding Blackrock Capital Investment Corp (NASDAQ:BKCC).
How are hedge funds trading Blackrock Capital Investment Corp (NASDAQ:BKCC)?
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, John Overdeck and David Siegel’s Two Sigma Advisors has the biggest position in Blackrock Capital Investment Corp (NASDAQ:BKCC), worth close to $2.8 million, amounting to less than 0.1% of its total 13F portfolio. The second most bullish fund manager is McKinley Capital Management, managed by Robert B. Gillam, which holds a $1.1 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish consist of Chao Ku’s Nine Chapters Capital Management, and Israel Englander’s Millennium Management.
Consequently, key money managers have jumped into Blackrock Capital Investment Corp (NASDAQ:BKCC) headfirst. Millennium Management, managed by Israel Englander, established the largest position in Blackrock Capital Investment Corp (NASDAQ:BKCC). Millennium Management had $0.6 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $0.1 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to Blackrock Capital Investment Corp (NASDAQ:BKCC). We will take a look at Cellectis SA (ADR) (NASDAQ:CLLS), CIRCOR International, Inc. (NYSE:CIR), Transocean Partners LLC (NYSE:RIGP), and The Pep Boys – Manny, Moe & Jack (NYSE:PBY). This group of stocks’ market caps are closest to BKCC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLLS | 11 | 27445 | 1 |
| CIR | 11 | 155482 | 2 |
| RIGP | 7 | 33841 | -1 |
| PBY | 18 | 147236 | 2 |
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $7 million in BKCC’s case. The Pep Boys – Manny, Moe & Jack (NYSE:PBY) is the most popular stock in this table. On the other hand Transocean Partners LLC (NYSE:RIGP) is the least popular one with only 7 bullish hedge fund positions. Blackrock Capital Investment Corp (NASDAQ:BKCC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PBY might be a better candidate to consider a long position.
