Is JBLU Stock A Buy or Sell?

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards JetBlue Airways Corporation (NASDAQ:JBLU).

Is JBLU stock a buy or sell? The best stock pickers were betting on the stock. The number of long hedge fund positions went up by 6 in recent months. JetBlue Airways Corporation (NASDAQ:JBLU) was in 29 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 42. Our calculations also showed that JBLU isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Paul Reeder of PAR Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 take a look at the new hedge fund action encompassing JetBlue Airways Corporation (NASDAQ:JBLU).

Do Hedge Funds Think JBLU Is A Good Stock To Buy Now?

At the end of the fourth quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from the previous quarter. The graph below displays the number of hedge funds with bullish position in JBLU over the last 22 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Senator Investment Group held the most valuable stake in JetBlue Airways Corporation (NASDAQ:JBLU), which was worth $50.9 million at the end of the fourth quarter. On the second spot was Candlestick Capital Management which amassed $46 million worth of shares. Adage Capital Management, Millennium Management, and PAR Capital Management 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 Levin Easterly Partners allocated the biggest weight to JetBlue Airways Corporation (NASDAQ:JBLU), around 1.52% of its 13F portfolio. NWI Management is also relatively very bullish on the stock, dishing out 1.13 percent of its 13F equity portfolio to JBLU.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the largest position in JetBlue Airways Corporation (NASDAQ:JBLU). Marshall Wace LLP had $21 million invested in the company at the end of the quarter. Stuart J. Zimmer’s Zimmer Partners also made a $17.1 million investment in the stock during the quarter. The other funds with brand new JBLU positions are John Murphy’s Levin Easterly Partners, Paul Tudor Jones’s Tudor Investment Corp, and Jack Ripsteen’s Potrero Capital Research.

Let’s also examine hedge fund activity in other stocks similar to JetBlue Airways Corporation (NASDAQ:JBLU). We will take a look at Kinsale Capital Group, Inc. (NASDAQ:KNSL), Colfax Corporation (NYSE:CFX), Immunovant, Inc. (NASDAQ:IMVT), Quaker Chemical Corp (NYSE:KWR), Crane Co. (NYSE:CR), SAGE Therapeutics Inc (NASDAQ:SAGE), and ICU Medical, Inc. (NASDAQ:ICUI). All of these stocks’ market caps are similar to JBLU’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $419 million. That figure was $345 million in JBLU’s case. Colfax Corporation (NYSE:CFX) is the most popular stock in this table. On the other hand Quaker Chemical Corp (NYSE:KWR) is the least popular one with only 13 bullish hedge fund positions. JetBlue Airways Corporation (NASDAQ:JBLU) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JBLU is 65.5. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on JBLU as the stock returned 41% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.