The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards BRP Inc. (NASDAQ:DOOO).
BRP Inc. (NASDAQ:DOOO) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of September. At the end of this article we will also compare DOOO to other stocks including Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), Harmony Gold Mining Co. (NYSE:HMY), and Eagle Bancorp, Inc. (NASDAQ:EGBN) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are dozens of formulas stock traders use to assess stocks. Two of the most underrated formulas are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the S&P 500 by a significant margin (see the details here).
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to check out the recent hedge fund action surrounding BRP Inc. (NASDAQ:DOOO).
What have hedge funds been doing with BRP Inc. (NASDAQ:DOOO)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2019. On the other hand, there were a total of 16 hedge funds with a bullish position in DOOO a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in BRP Inc. (NASDAQ:DOOO) was held by Arrowstreet Capital, which reported holding $19.6 million worth of stock at the end of September. It was followed by Marshall Wace with a $19.1 million position. Other investors bullish on the company included GLG Partners, Manatuck Hill Partners, and D E Shaw. In terms of the portfolio weights assigned to each position Manatuck Hill Partners allocated the biggest weight to BRP Inc. (NASDAQ:DOOO), around 2.5% of its 13F portfolio. Signition LP is also relatively very bullish on the stock, designating 1.1 percent of its 13F equity portfolio to DOOO.
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 now review hedge fund activity in other stocks similar to BRP Inc. (NASDAQ:DOOO). These stocks are Portfolio Recovery Associates, Inc. (NASDAQ:PRAA), Harmony Gold Mining Co. (NYSE:HMY), Eagle Bancorp, Inc. (NASDAQ:EGBN), and Meritor Inc (NYSE:MTOR). This group of stocks’ market caps are closest to DOOO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRAA | 10 | 34235 | 2 |
| HMY | 10 | 88514 | 0 |
| EGBN | 15 | 38861 | 4 |
| MTOR | 23 | 262577 | 0 |
| Average | 14.5 | 106047 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $68 million in DOOO’s case. Meritor Inc (NYSE:MTOR) is the most popular stock in this table. On the other hand Portfolio Recovery Associates, Inc. (NASDAQ:PRAA) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks BRP Inc. (NASDAQ:DOOO) is even less popular than PRAA. Hedge funds clearly dropped the ball on DOOO as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on DOOO as the stock returned 27.5% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
