With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was Sally Beauty Holdings, Inc. (NYSE:SBH).
Sally Beauty Holdings, Inc. (NYSE:SBH) has experienced a decrease in enthusiasm from smart money lately. Sally Beauty Holdings, Inc. (NYSE:SBH) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 28. There were 22 hedge funds in our database with SBH holdings at the end of June. Our calculations also showed that SBH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now let’s take a look at the key hedge fund action encompassing Sally Beauty Holdings, Inc. (NYSE:SBH).
Do Hedge Funds Think SBH Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SBH over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fisher Asset Management was the largest shareholder of Sally Beauty Holdings, Inc. (NYSE:SBH), with a stake worth $31 million reported as of the end of September. Trailing Fisher Asset Management was Arrowstreet Capital, which amassed a stake valued at $29.9 million. Millennium Management, GAMCO Investors, and Renaissance Technologies 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 Invenomic Capital Management allocated the biggest weight to Sally Beauty Holdings, Inc. (NYSE:SBH), around 0.51% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, earmarking 0.14 percent of its 13F equity portfolio to SBH.
Judging by the fact that Sally Beauty Holdings, Inc. (NYSE:SBH) has experienced declining sentiment from the smart money, we can see that there were a few money managers that slashed their entire stakes last quarter. Intriguingly, Brad Stephens’s Six Columns Capital dropped the biggest stake of the “upper crust” of funds followed by Insider Monkey, totaling close to $11 million in stock, and Elise Di Vincenzo Crumbine’s Stormborn Capital Management was right behind this move, as the fund cut about $7.2 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Sally Beauty Holdings, Inc. (NYSE:SBH) but similarly valued. These stocks are Ultra Clean Holdings Inc (NASDAQ:UCTT), Genworth Financial Inc (NYSE:GNW), Gogo Inc (NASDAQ:GOGO), Telos Corporation (NASDAQ:TLS), GMS Inc. (NYSE:GMS), Osisko Gold Royalties Ltd (NYSE:OR), and Adtalem Global Education Inc. (NYSE:ATGE). All of these stocks’ market caps are closest to SBH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UCTT | 19 | 132538 | -6 |
| GNW | 23 | 130883 | 3 |
| GOGO | 19 | 286171 | -3 |
| TLS | 12 | 182403 | -7 |
| GMS | 20 | 319509 | 1 |
| OR | 19 | 185490 | 0 |
| ATGE | 14 | 276614 | -5 |
| Average | 18 | 216230 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $216 million. That figure was $106 million in SBH’s case. Genworth Financial Inc (NYSE:GNW) is the most popular stock in this table. On the other hand Telos Corporation (NASDAQ:TLS) is the least popular one with only 12 bullish hedge fund positions. Sally Beauty Holdings, Inc. (NYSE:SBH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBH is 67.4. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on SBH as the stock returned 9.6% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Sally Beauty Holdings Inc. (NYSE:SBH)
Follow Sally Beauty Holdings Inc. (NYSE:SBH)
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Disclosure: None. This article was originally published at Insider Monkey.
