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 at 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. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Popular Inc (NASDAQ:BPOP) and determine whether the smart money was really smart about this stock.
Popular Inc (NASDAQ:BPOP) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 33 hedge funds’ portfolios at the end of September. Our calculations also showed that BPOP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Royal Gold, Inc (NASDAQ:RGLD), The Boston Beer Company Inc (NYSE:SAM), and Teradata Corporation (NYSE:TDC) to gather more data points.
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. With all of this in mind we’re going to review the new hedge fund action surrounding Popular Inc (NASDAQ:BPOP).
Bernard Horn of Polaris Capital Management
Do Hedge Funds Think BPOP Is A Good Stock To Buy Now?
At the end of September, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in BPOP a year ago. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Polaris Capital Management was the largest shareholder of Popular Inc (NASDAQ:BPOP), with a stake worth $260 million reported as of the end of September. Trailing Polaris Capital Management was AQR Capital Management, which amassed a stake valued at $93.9 million. Citadel Investment Group, Basswood Capital, and Arrowstreet Capital 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 Arctis Global allocated the biggest weight to Popular Inc (NASDAQ:BPOP), around 9.36% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, setting aside 8.29 percent of its 13F equity portfolio to BPOP.
Due to the fact that Popular Inc (NASDAQ:BPOP) has witnessed declining sentiment from the smart money, it’s easy to see that there exists a select few fund managers that elected to cut their full holdings last quarter. At the top of the heap, David Rosen’s Rubric Capital Management dumped the largest position of the 750 funds watched by Insider Monkey, worth an estimated $27.3 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also dropped its stock, about $9.4 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Popular Inc (NASDAQ:BPOP) but similarly valued. We will take a look at Royal Gold, Inc (NASDAQ:RGLD), The Boston Beer Company Inc (NYSE:SAM), Teradata Corporation (NYSE:TDC), Stericycle Inc (NASDAQ:SRCL), TriNet Group Inc (NYSE:TNET), Performance Food Group Company (NYSE:PFGC), and Affiliated Managers Group, Inc. (NYSE:AMG). This group of stocks’ market values match BPOP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RGLD | 21 | 168093 | 1 |
| SAM | 19 | 237876 | -23 |
| TDC | 28 | 583784 | 2 |
| SRCL | 17 | 516772 | -9 |
| TNET | 19 | 462214 | 1 |
| PFGC | 36 | 747258 | -5 |
| AMG | 30 | 753848 | 0 |
| Average | 24.3 | 495692 | -4.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.3 hedge funds with bullish positions and the average amount invested in these stocks was $496 million. That figure was $773 million in BPOP’s case. Performance Food Group Company (NYSE:PFGC) is the most popular stock in this table. On the other hand Stericycle Inc (NASDAQ:SRCL) is the least popular one with only 17 bullish hedge fund positions. Popular Inc (NASDAQ:BPOP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BPOP is 75.4. 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. Hedge funds were also right about betting on BPOP as the stock returned 15.5% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
