World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Is JetBlue Airways Corporation (NASDAQ:JBLU) a buy right now? The smart money is taking a pessimistic view. The number of long hedge fund positions went down by 5 in recent months. Our calculations also showed that jblu isn’t among the 30 most popular stocks among hedge funds. JBLU was in 26 hedge funds’ portfolios at the end of March. There were 31 hedge funds in our database with JBLU holdings at the end of the previous quarter.
Today there are plenty of methods market participants use to appraise stocks. A couple of the most useful methods are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top investment managers can beat their index-focused peers by a healthy amount (see the details here).
Cliff Asness of AQR Capital Management
We’re going to take a gander at the new hedge fund action encompassing JetBlue Airways Corporation (NASDAQ:JBLU).
Hedge fund activity in JetBlue Airways Corporation (NASDAQ:JBLU)
At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JBLU over the last 15 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
The largest stake in JetBlue Airways Corporation (NASDAQ:JBLU) was held by PAR Capital Management, which reported holding $143.6 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $100.4 million position. Other investors bullish on the company included AQR Capital Management, NWI Management, and Two Sigma Advisors.
Seeing as JetBlue Airways Corporation (NASDAQ:JBLU) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers that elected to cut their positions entirely heading into Q3. It’s worth mentioning that Steve Cohen’s Point72 Asset Management sold off the largest position of all the hedgies followed by Insider Monkey, valued at close to $24.8 million in stock, and Gregg Moskowitz’s Interval Partners was right behind this move, as the fund dumped about $16.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 5 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as JetBlue Airways Corporation (NASDAQ:JBLU) but similarly valued. We will take a look at Janus Henderson Group plc (NYSE:JHG), ICU Medical, Inc. (NASDAQ:ICUI), Wyndham Hotels & Resorts, Inc. (NYSE:WH), and Ashland Global Holdings Inc.. (NYSE:ASH). All of these stocks’ market caps are closest to JBLU’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JHG | 12 | 145597 | -3 |
| ICUI | 15 | 329228 | -5 |
| WH | 40 | 790556 | 3 |
| ASH | 30 | 1175282 | -7 |
| Average | 24.25 | 610166 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $610 million. That figure was $498 million in JBLU’s case. Wyndham Hotels & Resorts, Inc. (NYSE:WH) is the most popular stock in this table. On the other hand Janus Henderson Group plc (NYSE:JHG) is the least popular one with only 12 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 calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on JBLU as the stock returned 6.1% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
