The most recent 13F reporting period has come and gone, and Insider Monkey is back on top when it comes to leveraging this goldmine of data. We have processed the filings of more than 873 top investment firms that we track, and now have access to the aggregated insights of these filings, based on their holdings as of June 30, data not available anywhere else. Should you consider Bed Bath & Beyond Inc. (NASDAQ: BBBY) for your portfolio? We will use this invaluable collective wisdom to answer.
Bed Bath & Beyond Inc. (NASDAQ: BBBY) was in 21 hedge fund portfolios at the end of the second quarter of 2021. The all-time high for this statistic is 34. BBBY shareholders have seen a decline in activity against the world’s largest hedge funds recently. At the end of March, there were 23 hedge funds in our database with BBBY holdings. Our calculations also showed that BBBY is not in the top 30 stocks among hedge funds (click for Q2 ranking).
Why do we even pay attention to the sentiment of hedge funds? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see details here). Because of this, we believe that hedge fund sentiment is an extremely useful indicator that investors should look out for.
Matthew Hulsizer from PEAK6 Capital
At Insider Monkey, we search multiple sources to discover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we look at such stock prices emerging lithium stock. We go over lists like the top 10 EV stocks to pick the next Tesla to deliver 10x the return. While we recommend positions in just a tiny fraction of the companies we analyze, we review as many stocks as possible. We read letters from hedge fund investors and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With that in mind, we’ll take a look at the new hedge fund promotion that includes Bed Bath & Beyond Inc. (NASDAQ: BBBY).
Do hedge funds think BBBY is a good stock to buy now?
At the end of June, a total of 21 of the hedge funds tracked by Insider Monkey were long in this stock, a change of -9% from the previous quarter. On the flip side, a year ago there were a total of 33 hedge funds with a bullish position in BBBY. So let’s take a look at which hedge funds were among the top holders in the stock and which hedge funds were making big strides.
The largest stake in Bed Bath & Beyond Inc. (NASDAQ: BBBY) was held by Contrarius Investment Management, which held shares valued at $ 146.2 million at the end of June. It was followed by Arrowstreet Capital with a position of $ 80.3 million. Other investors optimistic about the company included Citadel Investment Group, DE Shaw, and Citadel Investment Group. In terms of the portfolio weights assigned to each position, Contrarius Investment Management gave Bed Bath & Beyond Inc. (NASDAQ: BBBY) the largest weight at around 7.11% of its 13F portfolio. SG Capital Management is also relatively bullish on the stock, distributing 0.37 percent of its 13F stock portfolio to BBBY.
Due to the fact that Bed Bath & Beyond Inc. (NASDAQ: BBBY) has seen bearish sentiment from hedge fund managers, we can see that there are a few fund managers who have decided to sell their entire stake by the end of year two for sale quarter. Interestingly, Renaissance Technologies cut the largest “upper crust” investment of Insider Monkey’s watchdog funds, valued at approximately $ 54.9 million in shares, and Greg Eisner’s Engineers Gate manager was right behind that move since the fund is in the Worth about $ 1.6 million was sold. These moves are interesting because the total hedge fund rates were cut by 2 funds by the end of the second quarter.
Now let’s look at hedge fund activity in other stocks similar to Bed Bath & Beyond Inc. (NASDAQ: BBBY). We’ll be taking a look at Hilton Grand Vacations Inc. (NYSE: HGV), AdaptHealth Corp. (NASDAQ: AHCO), Applied Industrial Technologies Inc (NYSE: AIT), Fabrinet (NYSE: FN), Insight Enterprises, Inc. (NASDAQ.) Throw: NSIT), Investors Bancorp, Inc. (NASDAQ: ISBC) and Ameris Bancorp (NASDAQ: ABCB). The market caps of all of these stocks are equal to the market capitalization of BBBY.
[table] Ticker, number of HRs with positions, total value of HR positions (x1000), change in HR position HGV, 34.973469.0 AHCO, 20.366938.3 AIT, 18.57979, -3 FN, 14.125328, – 1 NSIT, 19.368371.2 ISBC, 15.53960.3 ABCB, 15.89100, -1 average, 19.3.290735.0.4 [/table]
View the table here if you have formatting problems.
As you can see, these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $ 291 million. In the case of BBBY, it was $ 364 million. Hilton Grand Vacations Inc. (NYSE: HGV) is the most popular stock on this table. On the flip side, Fabrinet (NYSE: FN) is the least popular, with only 14 bullish hedge fund positions. Bed Bath & Beyond Inc. (NASDAQ: BBBY) isn’t the most popular stock in this group, but interest in hedge funds is still above average. Our hedge fund sentiment score for BBBY is 39 overall. Stocks with a higher number of hedge fund positions compared to other stocks and relative to their historical range receive a higher sentiment score. This is a slightly positive sign, but we prefer to spend our time researching stocks that hedge funds are piling on. Our calculations showed that the top 5 most popular hedge fund stocks returned 95.8% in 2019 and 2020, outperforming the S&P 500 ETF (SPY) by 40 percentage points. These stocks rose 24% through October 22, 2021, again beating the market 1.6 percentage points. Unfortunately, BBBY wasn’t nearly as popular as these 5 stocks and hedge funds that bet on BBBY were disappointed as the stock fell -57% since late June (through 10/22) and lagged the market. If you’re interested in investing in large-cap stocks with big upside potential, check out the top 5 most popular stocks among hedge funds, as many of these stocks have already outperformed the market since 2019.
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Disclosure: None. This article was originally published on Insider Monkey.