Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of BOK Financial Corporation (NASDAQ:BOKF) based on that data.
Is BOKF a good stock to buy now? Prominent investors were taking an optimistic view. The number of long hedge fund bets inched up by 4 in recent months. BOK Financial Corporation (NASDAQ:BOKF) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 22. Our calculations also showed that BOKF 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ric Dillon of Diamond Hill Capital
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 check out the new hedge fund action encompassing BOK Financial Corporation (NASDAQ:BOKF).
Do Hedge Funds Think BOKF Is A Good Stock To Buy Now?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in BOKF a year ago. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
More specifically, Ariel Investments was the largest shareholder of BOK Financial Corporation (NASDAQ:BOKF), with a stake worth $112.9 million reported as of the end of September. Trailing Ariel Investments was Diamond Hill Capital, which amassed a stake valued at $59.1 million. Arrowstreet Capital, Royce & Associates, and Citadel Investment Group 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 Ariel Investments allocated the biggest weight to BOK Financial Corporation (NASDAQ:BOKF), around 1.64% of its 13F portfolio. Diamond Hill Capital is also relatively very bullish on the stock, designating 0.33 percent of its 13F equity portfolio to BOKF.
As industrywide interest jumped, key money managers were breaking ground themselves. Renaissance Technologies, created the most outsized position in BOK Financial Corporation (NASDAQ:BOKF). Renaissance Technologies had $1.6 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also initiated a $1.5 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Mika Toikka’s AlphaCrest Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as BOK Financial Corporation (NASDAQ:BOKF) but similarly valued. These stocks are Devon Energy Corporation (NYSE:DVN), Madison Square Garden Sports Corp. (NYSE:MSGS), Rayonier Inc. (NYSE:RYN), Eagle Materials, Inc. (NYSE:EXP), Grocery Outlet Holding Corp. (NASDAQ:GO), Halozyme Therapeutics, Inc. (NASDAQ:HALO), and Rexnord Corp (NYSE:RXN). This group of stocks’ market caps are closest to BOKF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DVN | 44 | 537717 | -1 |
| MSGS | 48 | 967024 | 5 |
| RYN | 17 | 303710 | 0 |
| EXP | 31 | 472642 | -10 |
| GO | 18 | 119079 | -1 |
| HALO | 26 | 206784 | 0 |
| RXN | 24 | 319104 | -3 |
| Average | 29.7 | 418009 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $418 million. That figure was $230 million in BOKF’s case. Madison Square Garden Sports Corp. (NYSE:MSGS) is the most popular stock in this table. On the other hand Rayonier Inc. (NYSE:RYN) is the least popular one with only 17 bullish hedge fund positions. BOK Financial Corporation (NASDAQ:BOKF) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BOKF is 44.1. 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 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 BOKF as the stock returned 36.9% 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.
