The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider JetBlue Airways Corporation (NASDAQ:JBLU) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
JetBlue Airways Corporation (NASDAQ:JBLU) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 29 hedge funds’ portfolios at the end of March. Our calculations also showed that JBLU isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 Ritchie Bros. Auctioneers (NYSE:RBA), Pacific Biosciences of California (NASDAQ:PACB), and FirstService Corporation (TSE:FSV) to gather more data points.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Paul Reeder of PAR Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. With all of this in mind we’re going to 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 first quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in JBLU over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of JetBlue Airways Corporation (NASDAQ:JBLU), with a stake worth $69.1 million reported as of the end of March. Trailing D E Shaw was Candlestick Capital Management, which amassed a stake valued at $66.2 million. Millennium Management, PAR Capital Management, and Royce & Associates 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 Potrero Capital Research allocated the biggest weight to JetBlue Airways Corporation (NASDAQ:JBLU), around 2.42% of its 13F portfolio. Appian Way Asset Management is also relatively very bullish on the stock, setting aside 2.36 percent of its 13F equity portfolio to JBLU.
Because JetBlue Airways Corporation (NASDAQ:JBLU) has experienced falling interest from the smart money, logic holds that there exists a select few funds that decided to sell off their positions entirely heading into Q2. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP cut the biggest position of the 750 funds tracked by Insider Monkey, worth about $21 million in stock, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management was right behind this move, as the fund sold off about $2.9 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to JetBlue Airways Corporation (NASDAQ:JBLU). These stocks are Ritchie Bros. Auctioneers (NYSE:RBA), Pacific Biosciences of California (NASDAQ:PACB), FirstService Corporation (TSE:FSV), Huntsman Corporation (NYSE:HUN), eXp World Holdings, Inc. (NASDAQ:EXPI), Apartment Income REIT Corp. (NYSE:AIRC), and Sonoco Products Company (NYSE:SON). This group of stocks’ market valuations match JBLU’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RBA | 19 | 345121 | -4 |
| PACB | 24 | 1492893 | 1 |
| FSV | 17 | 238970 | 1 |
| HUN | 35 | 735950 | 6 |
| EXPI | 15 | 171695 | -5 |
| AIRC | 14 | 210803 | -3 |
| SON | 25 | 157746 | 5 |
| Average | 21.3 | 479025 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $479 million. That figure was $426 million in JBLU’s case. Huntsman Corporation (NYSE:HUN) is the most popular stock in this table. On the other hand Apartment Income REIT Corp. (NYSE:AIRC) is the least popular one with only 14 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 61.4. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately JBLU wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JBLU were disappointed as the stock returned -15.9% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Jetblue Airways Corp (NASDAQ:JBLU)
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Disclosure: None. This article was originally published at Insider Monkey.
