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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Ballard Power Systems Inc. (NASDAQ:BLDP).
Ballard Power Systems Inc. (NASDAQ:BLDP) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic is 21. BLDP shareholders have witnessed a decrease in enthusiasm from smart money in recent months. There were 20 hedge funds in our database with BLDP positions at the end of the fourth quarter. Our calculations also showed that BLDP isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 115 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
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. Keeping this in mind let’s check out the new hedge fund action encompassing Ballard Power Systems Inc. (NASDAQ:BLDP).
Do Hedge Funds Think BLDP Is A Good Stock To Buy Now?
At the end of March, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BLDP over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Lansdowne Partners was the largest shareholder of Ballard Power Systems Inc. (NASDAQ:BLDP), with a stake worth $31.7 million reported as of the end of March. Trailing Lansdowne Partners was Millennium Management, which amassed a stake valued at $21.8 million. Citadel Investment Group, Citadel Investment Group, and D E Shaw 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 Quaero Capital allocated the biggest weight to Ballard Power Systems Inc. (NASDAQ:BLDP), around 2.18% of its 13F portfolio. Aubrey Capital Management is also relatively very bullish on the stock, designating 1.72 percent of its 13F equity portfolio to BLDP.
Seeing as Ballard Power Systems Inc. (NASDAQ:BLDP) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of fund managers that slashed their full holdings in the first quarter. Intriguingly, Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the largest position of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $84.3 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also cut its stock, about $8.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the first quarter.
Let’s now review hedge fund activity in other stocks similar to Ballard Power Systems Inc. (NASDAQ:BLDP). We will take a look at MINISO Group Holding Limited (NYSE:MNSO), GW Pharmaceuticals plc (NASDAQ:GWPH), Post Holdings Inc (NYSE:POST), Synovus Financial Corp. (NYSE:SNV), Dicks Sporting Goods Inc (NYSE:DKS), TG Therapeutics Inc (NASDAQ:TGTX), and Apache Corporation (NYSE:APA). All of these stocks’ market caps are similar to BLDP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MNSO | 12 | 87616 | -6 |
| GWPH | 40 | 2735520 | 23 |
| POST | 33 | 1567551 | 6 |
| SNV | 30 | 264409 | -3 |
| DKS | 31 | 852354 | -11 |
| TGTX | 27 | 859565 | -11 |
| APA | 42 | 497934 | 7 |
| Average | 30.7 | 980707 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.7 hedge funds with bullish positions and the average amount invested in these stocks was $981 million. That figure was $126 million in BLDP’s case. Apache Corporation (NYSE:APA) is the most popular stock in this table. On the other hand MINISO Group Holding Limited (NYSE:MNSO) is the least popular one with only 12 bullish hedge fund positions. Ballard Power Systems Inc. (NASDAQ:BLDP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BLDP is 38.7. 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 negative signal and 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately BLDP wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BLDP investors were disappointed as the stock returned -35.3% since the end of March (through 7/23) 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 most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
