The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Bright Horizons Family Solutions Inc (NYSE:BFAM).
Bright Horizons Family Solutions Inc (NYSE:BFAM) was in 18 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 34. BFAM has seen a decrease in hedge fund interest lately. There were 20 hedge funds in our database with BFAM positions at the end of the fourth quarter. Our calculations also showed that BFAM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To the average investor there are tons of signals shareholders employ to evaluate their stock investments. A duo of the most under-the-radar signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best fund managers can outpace their index-focused peers by a very impressive amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ray Dalio of Bridgewater Associates
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Do Hedge Funds Think BFAM Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the fourth quarter of 2020. On the other hand, there were a total of 27 hedge funds with a bullish position in BFAM a year ago. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, John Osterweis’s Osterweis Capital Management has the number one position in Bright Horizons Family Solutions Inc (NYSE:BFAM), worth close to $22.7 million, amounting to 1.2% of its total 13F portfolio. The second most bullish fund manager is Ken Griffin of Citadel Investment Group, with a $14.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions contain Ray Dalio’s Bridgewater Associates, Israel Englander’s Millennium Management and Brandon Haley’s Holocene Advisors. In terms of the portfolio weights assigned to each position Osterweis Capital Management allocated the biggest weight to Bright Horizons Family Solutions Inc (NYSE:BFAM), around 1.24% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, earmarking 0.28 percent of its 13F equity portfolio to BFAM.
Due to the fact that Bright Horizons Family Solutions Inc (NYSE:BFAM) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few hedge funds who sold off their entire stakes in the first quarter. It’s worth mentioning that Robert Pitts’s Steadfast Capital Management dumped the largest stake of the 750 funds monitored by Insider Monkey, worth an estimated $153.4 million in stock. Kris Jenner, Gordon Bussard, Graham McPhail’s fund, Rock Springs Capital Management, also dumped its stock, about $28.6 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds in the first quarter.
Let’s now review hedge fund activity in other stocks similar to Bright Horizons Family Solutions Inc (NYSE:BFAM). These stocks are ICON Public Limited Company (NASDAQ:ICLR), Pentair plc (NYSE:PNR), Molson Coors Beverage Company (NYSE:TAP), MKS Instruments, Inc. (NASDAQ:MKSI), Dun & Bradstreet Corporation (NYSE:DNB), Dr. Reddy’s Laboratories Limited (NYSE:RDY), and Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH). This group of stocks’ market valuations are similar to BFAM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICLR | 29 | 731050 | 0 |
| PNR | 30 | 775268 | 1 |
| TAP | 34 | 341099 | -5 |
| MKSI | 22 | 512507 | -5 |
| DNB | 29 | 835475 | -3 |
| RDY | 12 | 180324 | 0 |
| NCLH | 34 | 576202 | -6 |
| Average | 27.1 | 564561 | -2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $565 million. That figure was $78 million in BFAM’s case. Molson Coors Beverage Company (NYSE:TAP) is the most popular stock in this table. On the other hand Dr. Reddy’s Laboratories Limited (NYSE:RDY) is the least popular one with only 12 bullish hedge fund positions. Bright Horizons Family Solutions Inc (NYSE:BFAM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BFAM is 32.5. 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 BFAM wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BFAM investors were disappointed as the stock returned -10% 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.
Follow Bright Horizons Family Solutions Inc. (NYSE:BFAM)
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Disclosure: None. This article was originally published at Insider Monkey.
