Should You Buy BlackBerry Ltd (BBRY)?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their superior performance, which is why we pay particular attention to their best ideas in this space.

Is BlackBerry Ltd (NASDAQ:BBRY) a first-rate investment today? The smart money is getting more bullish. The number of bullish hedge fund positions went up by 3 recently. BBRY was in 23 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with BBRY positions at the end of the previous quarter. 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 Intercept Pharmaceuticals Inc (NASDAQ:ICPT), Morningstar, Inc. (NASDAQ:MORN), and Oshkosh Corporation (NYSE:OSK) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, let’s review the recent action encompassing BlackBerry Ltd (NASDAQ:BBRY).

Hedge fund activity in BlackBerry Ltd (NASDAQ:BBRY)

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a jump of 15% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fairfax Financial Holdings, managed by Prem Watsa, holds the biggest position in BlackBerry Ltd (NASDAQ:BBRY). The fund reportedly has a $372.6 million position in the stock, comprising 33.6% of its 13F portfolio. On Fairfax Financial Holdings’s heels is Jim Simons’ Renaissance Technologies, with a $149.9 million position; 0.3% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism comprise David Cohen and Harold Levy’s Iridian Asset Management, Irving Kahn’s Kahn Brothers and D. E. Shaw’s D E Shaw.

Consequently, key money managers were leading the bulls’ herd. Iridian Asset Management, led by David Cohen and Harold Levy, established the most valuable position in BlackBerry Ltd (NASDAQ:BBRY). According to regulatory filings, the fund had $115 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $4.9 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Matthew Tewksbury’s Stevens Capital Management, and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s go over hedge fund activity in other stocks similar to BlackBerry Ltd (NASDAQ:BBRY). These stocks are Intercept Pharmaceuticals Inc (NASDAQ:ICPT), Morningstar, Inc. (NASDAQ:MORN), Oshkosh Corporation (NYSE:OSK), and Lancaster Colony Corp. (NASDAQ:LANC). This group of stocks’ market caps match BBRY’s market cap.

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 $274 million. That figure was a whooping $794 million in BBRY’s case. Oshkosh Corporation (NYSE:OSK) is the most popular stock in this table. On the other hand Lancaster Colony Corp. (NASDAQ:LANC) is the least popular one with only 14 bullish hedge fund positions. BlackBerry Ltd (NASDAQ:BBRY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OSK might be a better candidate to consider a long position.

Disclosure: none.