Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about BRP Inc. (NASDAQ:DOOO) in this article.
Is BRP Inc. (NASDAQ:DOOO) a healthy stock for your portfolio? The best stock pickers were turning bullish. The number of long hedge fund positions advanced by 2 in recent months. BRP Inc. (NASDAQ:DOOO) was in 17 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that DOOO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 15 hedge funds in our database with DOOO holdings at the end of December.
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.
David Siegel of Two Sigma Advisors
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. With all of this in mind let’s take a peek at the fresh hedge fund action regarding BRP Inc. (NASDAQ:DOOO).
Do Hedge Funds Think DOOO Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards DOOO over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in BRP Inc. (NASDAQ:DOOO) was held by D E Shaw, which reported holding $53.6 million worth of stock at the end of December. It was followed by Arrowstreet Capital with a $47.9 million position. Other investors bullish on the company included Renaissance Technologies, Two Sigma Advisors, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Driehaus Capital allocated the biggest weight to BRP Inc. (NASDAQ:DOOO), around 0.22% of its 13F portfolio. McKinley Capital Management is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to DOOO.
As industrywide interest jumped, key money managers have jumped into BRP Inc. (NASDAQ:DOOO) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the biggest position in BRP Inc. (NASDAQ:DOOO). Marshall Wace LLP had $2.8 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also made a $2.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Israel Englander’s Millennium Management, and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as BRP Inc. (NASDAQ:DOOO) but similarly valued. We will take a look at Euronet Worldwide, Inc. (NASDAQ:EEFT), Targa Resources Corp (NYSE:TRGP), Virgin Galactic Holdings, Inc. (NYSE:SPCE), Tripadvisor Inc (NASDAQ:TRIP), Phillips 66 Partners LP (NYSE:PSXP), Proofpoint Inc (NASDAQ:PFPT), and OneMain Holdings Inc (NYSE:OMF). All of these stocks’ market caps are closest to DOOO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EEFT | 40 | 511517 | 8 |
| TRGP | 24 | 531977 | -5 |
| SPCE | 17 | 210974 | -6 |
| TRIP | 45 | 1975906 | 4 |
| PSXP | 5 | 45200 | 1 |
| PFPT | 22 | 455170 | -4 |
| OMF | 43 | 886893 | 13 |
| Average | 28 | 659662 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $660 million. That figure was $197 million in DOOO’s case. Tripadvisor Inc (NASDAQ:TRIP) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only 5 bullish hedge fund positions. BRP Inc. (NASDAQ:DOOO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DOOO is 52. 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 DOOO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); DOOO investors were disappointed as the stock returned -6.8% 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.
