While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Brooge Energy Limited (NASDAQ:BROG).
Is BROG a good stock to buy? Hedge fund interest in Brooge Energy Limited (NASDAQ:BROG) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BROG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare BROG to other stocks including Colony Credit Real Estate, Inc. (NYSE:CLNC), Diebold Nixdorf Incorporated (NYSE:DBD), and Prothena Corporation plc (NASDAQ:PRTA) to get a better sense of its popularity.
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Michael Platt of BlueCrest Capital Mgmt.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s take a look at the fresh hedge fund action regarding Brooge Energy Limited (NASDAQ:BROG).
Do Hedge Funds Think BROG Is A Good Stock To Buy Now?
At the end of March, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2020. On the other hand, there were a total of 7 hedge funds with a bullish position in BROG 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.
Among these funds, Magnetar Capital held the most valuable stake in Brooge Energy Limited (NASDAQ:BROG), which was worth $20.2 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $10.1 million worth of shares. BlueCrest Capital Mgmt., BlueCrest Capital Mgmt., and 683 Capital Partners 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 Magnetar Capital allocated the biggest weight to Brooge Energy Limited (NASDAQ:BROG), around 0.19% of its 13F portfolio. BlueCrest Capital Mgmt. is also relatively very bullish on the stock, setting aside 0.13 percent of its 13F equity portfolio to BROG.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s check out hedge fund activity in other stocks similar to Brooge Energy Limited (NASDAQ:BROG). These stocks are Colony Credit Real Estate, Inc. (NYSE:CLNC), Diebold Nixdorf Incorporated (NYSE:DBD), Prothena Corporation plc (NASDAQ:PRTA), Trillium Therapeutics Inc. (NASDAQ:TRIL), Omeros Corporation (NASDAQ:OMER), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), and Zumiez Inc. (NASDAQ:ZUMZ). This group of stocks’ market caps are closest to BROG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLNC | 8 | 58730 | -2 |
| DBD | 19 | 183518 | 1 |
| PRTA | 17 | 450354 | -3 |
| TRIL | 27 | 343747 | -9 |
| OMER | 12 | 129925 | 2 |
| AXL | 21 | 66993 | 1 |
| ZUMZ | 20 | 52649 | -1 |
| Average | 17.7 | 183702 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.7 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $41 million in BROG’s case. Trillium Therapeutics Inc. (NASDAQ:TRIL) is the most popular stock in this table. On the other hand Colony Credit Real Estate, Inc. (NYSE:CLNC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Brooge Energy Limited (NASDAQ:BROG) is even less popular than CLNC. Our overall hedge fund sentiment score for BROG is 21.4. 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. Hedge funds dodged a bullet by taking a bearish stance towards BROG. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th but managed to beat the market again by 4.8 percentage points. Unfortunately BROG wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); BROG investors were disappointed as the stock returned -12% since the end of the first quarter (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Brooge Energy Ltd (NASDAQ:BROG)
Follow Brooge Energy Ltd (NASDAQ:BROG)
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Disclosure: None. This article was originally published at Insider Monkey.
