Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks aren't doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Blue Bird Corporation (NASDAQ:BLBD) changed recently.
Is BLBD a good stock to buy now? Blue Bird Corporation (NASDAQ:BLBD) investors should pay attention to an increase in activity from the world's largest hedge funds lately. Blue Bird Corporation (NASDAQ:BLBD) was in 11 hedge funds' portfolios at the end of September. The all time high for this statistics is 22. Our calculations also showed that BLBD isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David E. Shaw of D.E. Shaw
David E. Shaw of D.E. Shaw
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let's go over the fresh hedge fund action surrounding Blue Bird Corporation (NASDAQ:BLBD).
Do Hedge Funds Think BLBD Is A Good Stock To Buy Now?
At the end of September, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BLBD over the last 21 quarters. With the smart money's capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Renaissance Technologies has the number one position in Blue Bird Corporation (NASDAQ:BLBD), worth close to $7.5 million, comprising less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Coliseum Capital, managed by Christopher Shackelton and Adam Gray, which holds a $6.3 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Jeffrey Moskowitz's Harvey Partners and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Harvey Partners allocated the biggest weight to Blue Bird Corporation (NASDAQ:BLBD), around 1.03% of its 13F portfolio. Coliseum Capital is also relatively very bullish on the stock, designating 0.67 percent of its 13F equity portfolio to BLBD.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Harvey Partners, managed by Jeffrey Moskowitz, established the most outsized position in Blue Bird Corporation (NASDAQ:BLBD). Harvey Partners had $0.8 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also made a $0.2 million investment in the stock during the quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Blue Bird Corporation (NASDAQ:BLBD) but similarly valued. These stocks are Amalgamated Bank (NASDAQ:AMAL), Magenta Therapeutics, Inc. (NASDAQ:MGTA), Ituran Location and Control Ltd. (NASDAQ:ITRN), City Office REIT Inc (NYSE:CIO), Blink Charging Co. (NASDAQ:BLNK), Seneca Foods Corp (NASDAQ:SENEA), and Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL). This group of stocks' market values match BLBD's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMAL,9,21646,0 MGTA,16,43142,-6 ITRN,7,43042,-2 CIO,15,29144,2 BLNK,5,12486,3 SENEA,11,32029,2 AOSL,11,37899,1 Average,10.6,31341,0 [/table]
As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $19 million in BLBD's case. Magenta Therapeutics, Inc. (NASDAQ:MGTA) is the most popular stock in this table. On the other hand Blink Charging Co. (NASDAQ:BLNK) is the least popular one with only 5 bullish hedge fund positions. Blue Bird Corporation (NASDAQ:BLBD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BLBD is 48.3. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on BLBD as the stock returned 39.8% since the end of Q3 (through 12/8) 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.
