The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Bank of Hawaii Corporation (NYSE:BOH).
Is BOH a good stock to buy now? Bank of Hawaii Corporation (NYSE:BOH) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BOH has experienced an increase in hedge fund interest in recent months. There were 18 hedge funds in our database with BOH positions at the end of the second quarter. Our calculations also showed that BOH 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
David Siegel 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 let’s analyze the new hedge fund action surrounding Bank of Hawaii Corporation (NYSE:BOH).
Do Hedge Funds Think BOH Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter of 2020. On the other hand, there were a total of 14 hedge funds with a bullish position in BOH a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Bank of Hawaii Corporation (NYSE:BOH), with a stake worth $18.3 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $10.4 million. Millennium Management, GLG Partners, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Algert Global allocated the biggest weight to Bank of Hawaii Corporation (NYSE:BOH), around 0.07% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, setting aside 0.07 percent of its 13F equity portfolio to BOH.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. D E Shaw, managed by D. E. Shaw, established the most outsized position in Bank of Hawaii Corporation (NYSE:BOH). D E Shaw had $3.1 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also made a $1.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management, Peter Algert’s Algert Global, and Mika Toikka’s AlphaCrest Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Bank of Hawaii Corporation (NYSE:BOH) but similarly valued. We will take a look at Ryman Hospitality Properties, Inc. (NYSE:RHP), American Equity Investment Life Holding Company (NYSE:AEL), PacWest Bancorp (NASDAQ:PACW), Axonics Modulation Technologies, Inc. (NASDAQ:AXNX), Compass Minerals International, Inc. (NYSE:CMP), Corcept Therapeutics Incorporated (NASDAQ:CORT), and Red Rock Resorts, Inc. (NASDAQ:RRR). This group of stocks’ market values match BOH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RHP | 24 | 405247 | -1 |
| AEL | 12 | 37048 | 0 |
| PACW | 28 | 247992 | 4 |
| AXNX | 28 | 371489 | 2 |
| CMP | 14 | 67272 | -4 |
| CORT | 22 | 238362 | -1 |
| RRR | 29 | 361467 | -1 |
| Average | 22.4 | 246982 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.4 hedge funds with bullish positions and the average amount invested in these stocks was $247 million. That figure was $70 million in BOH’s case. Red Rock Resorts, Inc. (NASDAQ:RRR) is the most popular stock in this table. On the other hand American Equity Investment Life Holding Company (NYSE:AEL) is the least popular one with only 12 bullish hedge fund positions. Bank of Hawaii Corporation (NYSE:BOH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BOH is 64.5. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on BOH as the stock returned 55.7% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
