After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards TopBuild Corp (NYSE:BLD).
TopBuild Corp (NYSE:BLD) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. TopBuild Corp (NYSE:BLD) was in 22 hedge funds’ portfolios at the end of June. The all time high for this statistic is 30. Our calculations also showed that BLD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
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Do Hedge Funds Think BLD Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BLD over the last 24 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, ValueAct Capital was the largest shareholder of TopBuild Corp (NYSE:BLD), with a stake worth $94.9 million reported as of the end of June. Trailing ValueAct Capital was Millennium Management, which amassed a stake valued at $69.7 million. Royce & Associates, Citadel Investment Group, and North Fourth Asset 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 North Fourth Asset Management allocated the biggest weight to TopBuild Corp (NYSE:BLD), around 1.31% of its 13F portfolio. ValueAct Capital is also relatively very bullish on the stock, dishing out 1.13 percent of its 13F equity portfolio to BLD.
As industrywide interest jumped, some big names were leading the bulls’ herd. North Fourth Asset Management, managed by Anthony Joseph Vaccarino, assembled the most outsized position in TopBuild Corp (NYSE:BLD). North Fourth Asset Management had $7.4 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $4.5 million position during the quarter. The following funds were also among the new BLD investors: D. E. Shaw’s D E Shaw, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Jinghua Yan’s TwinBeech Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TopBuild Corp (NYSE:BLD) but similarly valued. We will take a look at Ritchie Bros. Auctioneers (NYSE:RBA), Columbia Sportswear Company (NASDAQ:COLM), KT Corporation (NYSE:KT), Fox Factory Holding Corp (NASDAQ:FOXF), BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ), Synovus Financial Corp. (NYSE:SNV), and Hanesbrands Inc. (NYSE:HBI). This group of stocks’ market caps resemble BLD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RBA | 22 | 378831 | 3 |
| COLM | 29 | 243951 | 8 |
| KT | 14 | 181363 | 2 |
| FOXF | 14 | 99033 | 0 |
| BJ | 17 | 103834 | 3 |
| SNV | 30 | 232034 | 0 |
| HBI | 33 | 970597 | 1 |
| Average | 22.7 | 315663 | 2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.7 hedge funds with bullish positions and the average amount invested in these stocks was $316 million. That figure was $233 million in BLD’s case. Hanesbrands Inc. (NYSE:HBI) is the most popular stock in this table. On the other hand KT Corporation (NYSE:KT) is the least popular one with only 14 bullish hedge fund positions. TopBuild Corp (NYSE:BLD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BLD is 52.1. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on BLD as the stock returned 23.1% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
