A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Driven Brands Holdings Inc. (NASDAQ:DRVN).
Driven Brands Holdings Inc. (NASDAQ:DRVN) investors should be aware of an increase in hedge fund interest of late. Driven Brands Holdings Inc. (NASDAQ:DRVN) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 18 hedge funds in our database with DRVN positions at the end of the first quarter. Our calculations also showed that DRVN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Sander Gerber of Hudson Bay Capital
With all of this in mind let’s view the recent hedge fund action surrounding Driven Brands Holdings Inc. (NASDAQ:DRVN).
Do Hedge Funds Think DRVN Is A Good Stock To Buy Now?
At second quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards DRVN over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Woodson Capital Management held the most valuable stake in Driven Brands Holdings Inc. (NASDAQ:DRVN), which was worth $20.7 million at the end of the second quarter. On the second spot was Stormborn Capital Management which amassed $11.3 million worth of shares. Point72 Asset Management, Becker Drapkin Management, and Alyeska Investment Group 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 Stormborn Capital Management allocated the biggest weight to Driven Brands Holdings Inc. (NASDAQ:DRVN), around 3.8% of its 13F portfolio. Becker Drapkin Management is also relatively very bullish on the stock, setting aside 2.99 percent of its 13F equity portfolio to DRVN.
Consequently, some big names were breaking ground themselves. Becker Drapkin Management, managed by Matthew Drapkin and Steven R. Becker, initiated the most outsized position in Driven Brands Holdings Inc. (NASDAQ:DRVN). Becker Drapkin Management had $10.2 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $3.9 million investment in the stock during the quarter. The other funds with brand new DRVN positions are Renaissance Technologies, Israel Englander’s Millennium Management, and Jinghua Yan’s TwinBeech Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Driven Brands Holdings Inc. (NASDAQ:DRVN) but similarly valued. We will take a look at ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), ChampionX Corporation (NYSE:CHX), WESCO International, Inc. (NYSE:WCC), ASGN Incorporated (NYSE:ASGN), Armstrong World Industries, Inc. (NYSE:AWI), Reata Pharmaceuticals, Inc. (NASDAQ:RETA), and Blueprint Medicines Corporation (NASDAQ:BPMC). This group of stocks’ market values are closest to DRVN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZIM | 25 | 327039 | 11 |
| CHX | 30 | 525472 | 2 |
| WCC | 23 | 1196955 | -5 |
| ASGN | 15 | 59880 | -5 |
| AWI | 17 | 595141 | -8 |
| RETA | 18 | 305350 | -6 |
| BPMC | 36 | 848485 | 5 |
| Average | 23.4 | 551189 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $551 million. That figure was $91 million in DRVN’s case. Blueprint Medicines Corporation (NASDAQ:BPMC) is the most popular stock in this table. On the other hand ASGN Incorporated (NYSE:ASGN) is the least popular one with only 15 bullish hedge fund positions. Driven Brands Holdings Inc. (NASDAQ:DRVN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DRVN is 45.5. 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. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on DRVN as the stock returned 4% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
