Is Brookline Bancorp, Inc. (BRKL) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Brookline Bancorp, Inc. (NASDAQ:BRKL).

Is Brookline Bancorp, Inc. (NASDAQ:BRKL) ready to rally soon? The smart money is actually reducing their bets on the stock. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings retreated by 2 lately. There were 11 hedge funds in our database with BRKL positions at the end of the previous quarter. 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 Jumei International Holding Ltd (ADR) (NYSE:JMEI), Eclipse Resources Corp (NYSE:ECR), and A. Schulman Inc (NASDAQ:SHLM) to gather more data points.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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Keeping this in mind, let’s take a look at the key action surrounding Brookline Bancorp, Inc. (NASDAQ:BRKL).

How are hedge funds trading Brookline Bancorp, Inc. (NASDAQ:BRKL)?

Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 15% from the second quarter of 2016. By comparison, 12 hedge funds held shares or bullish call options in BRKL heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, has the biggest position in Brookline Bancorp, Inc. (NASDAQ:BRKL), worth close to $11.5 million, accounting for less than 0.1% of its total 13F portfolio. The second largest stake is held by Bernard Horn of Polaris Capital Management, which oversees a $10.8 million position; 0.8% of its 13F portfolio is allocated to the company. Other peers that are bullish contain Chuck Royce’s Royce & Associates, Cliff Asness’ AQR Capital Management and D. E. Shaw’s D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Because Brookline Bancorp, Inc. (NASDAQ:BRKL) has gone through a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of fund managers that decided to sell off their full holdings by the end of the third quarter. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp got rid of the largest position of the “upper crust” of funds followed by Insider Monkey, totaling about $0.4 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its stock, about $0.2 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Brookline Bancorp, Inc. (NASDAQ:BRKL). These stocks are Jumei International Holding Ltd (ADR) (NYSE:JMEI), Eclipse Resources Corp (NYSE:ECR), A. Schulman Inc (NASDAQ:SHLM), and Duluth Holdings Inc (NASDAQ:DLTH). This group of stocks’ market values match BRKL’s market value.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $36 million in BRKL’s case. Eclipse Resources Corp (NYSE:ECR) is the most popular stock in this table. On the other hand Duluth Holdings Inc (NASDAQ:DLTH) is the least popular one with only 8 bullish hedge fund positions. Brookline Bancorp, Inc. (NASDAQ:BRKL) 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 ECR might be a better candidate to consider taking a long position in.

Disclosure: none.