Was The Smart Money Right About Bloomin’ Brands Inc (BLMN)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Bloomin’ Brands Inc (NASDAQ:BLMN) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

Is Bloomin’ Brands Inc (NASDAQ:BLMN) the right pick for your portfolio? The best stock pickers were becoming more confident. The number of bullish hedge fund positions rose by 1 lately. Bloomin’ Brands Inc (NASDAQ:BLMN) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 36. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BLMN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 36 hedge funds in our database with BLMN positions at the end of the second quarter.

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. Keeping this in mind let’s take a look at the fresh hedge fund action surrounding Bloomin’ Brands Inc (NASDAQ:BLMN).

Peter Rathjens of Arrowstreet Capital

Do Hedge Funds Think BLMN Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BLMN 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.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Brett Barakett’s Tremblant Capital has the most valuable position in Bloomin’ Brands Inc (NASDAQ:BLMN), worth close to $72.9 million, comprising 2.3% of its total 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $62.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism comprise Alexander Mitchell’s Scopus Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Isomer Partners allocated the biggest weight to Bloomin’ Brands Inc (NASDAQ:BLMN), around 5.77% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, dishing out 4.18 percent of its 13F equity portfolio to BLMN.

Consequently, key hedge funds were leading the bulls’ herd. Kettle Hill Capital Management, managed by Andrew Kurita, assembled the largest position in Bloomin’ Brands Inc (NASDAQ:BLMN). Kettle Hill Capital Management had $14.5 million invested in the company at the end of the quarter. Simon Sadler’s Segantii Capital also initiated a $14 million position during the quarter. The other funds with brand new BLMN positions are Renaissance Technologies, Elise Di Vincenzo Crumbine’s Stormborn Capital Management, and Robert Pohly’s Samlyn Capital.

Let’s also examine hedge fund activity in other stocks similar to Bloomin’ Brands Inc (NASDAQ:BLMN). These stocks are WesBanco, Inc. (NASDAQ:WSBC), Abercrombie & Fitch Co. (NYSE:ANF), Patria Investments Limited (NASDAQ:PAX), TreeHouse Foods Inc. (NYSE:THS), N-able Inc. (NYSE:NABL), Pactiv Evergreen Inc. (NASDAQ:PTVE), and American Well Corporation (NYSE:AMWL). This group of stocks’ market valuations match BLMN’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $269 million. That figure was $624 million in BLMN’s case. Abercrombie & Fitch Co. (NYSE:ANF) is the most popular stock in this table. On the other hand Pactiv Evergreen Inc. (NASDAQ:PTVE) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Bloomin’ Brands Inc (NASDAQ:BLMN) is more popular among hedge funds. Our overall hedge fund sentiment score for BLMN is 86. 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. Unfortunately, BLMN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BLMN were disappointed as the stock returned -18.7% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.