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 Black Hills Corporation (NYSE:BKH) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Black Hills Corporation (NYSE:BKH) worth your attention right now? The smart money was getting less bullish. The number of long hedge fund positions were cut by 1 in recent months. Black Hills Corporation (NYSE:BKH) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic is 24. Our calculations also showed that BKH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 19 hedge funds in our database with BKH positions at the end of the fourth quarter.
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Do Hedge Funds Think BKH Is A Good Stock To Buy Now?
At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BKH over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in Black Hills Corporation (NYSE:BKH) was held by Royce & Associates, which reported holding $27 million worth of stock at the end of December. It was followed by GAMCO Investors with a $14.3 million position. Other investors bullish on the company included Adage Capital Management, Renaissance Technologies, and Millennium Management. In terms of the portfolio weights assigned to each position Coann Capital allocated the biggest weight to Black Hills Corporation (NYSE:BKH), around 4.81% of its 13F portfolio. Huber Capital Management is also relatively very bullish on the stock, designating 0.37 percent of its 13F equity portfolio to BKH.
Seeing as Black Hills Corporation (NYSE:BKH) has experienced a decline in interest from the smart money, logic holds that there was a specific group of fund managers that decided to sell off their positions entirely heading into Q2. Interestingly, Noah Levy and Eugene Dozortsev’s Newtyn Management cut the largest stake of all the hedgies followed by Insider Monkey, valued at an estimated $4.6 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also sold off its stock, about $2.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 funds heading into Q2.
Let’s go over hedge fund activity in other stocks similar to Black Hills Corporation (NYSE:BKH). We will take a look at WD-40 Company (NASDAQ:WDFC), Arena Pharmaceuticals, Inc. (NASDAQ:ARNA), Yamana Gold Inc. (NYSE:AUY), Advanced Energy Industries, Inc. (NASDAQ:AEIS), JBG SMITH Properties (NYSE:JBGS), Certara, Inc. (NASDAQ:CERT), and Endava plc (NYSE:DAVA). This group of stocks’ market caps resemble BKH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WDFC | 14 | 176222 | -1 |
| ARNA | 33 | 822587 | -6 |
| AUY | 21 | 157547 | 1 |
| AEIS | 23 | 107038 | 1 |
| JBGS | 11 | 207465 | -5 |
| CERT | 12 | 149884 | -7 |
| DAVA | 9 | 80407 | -1 |
| Average | 17.6 | 243021 | -2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.6 hedge funds with bullish positions and the average amount invested in these stocks was $243 million. That figure was $90 million in BKH’s case. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) is the most popular stock in this table. On the other hand Endava plc (NYSE:DAVA) is the least popular one with only 9 bullish hedge fund positions. Black Hills Corporation (NYSE:BKH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BKH is 45.3. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately BKH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BKH were disappointed as the stock returned 2.2% 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
