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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded BlackBerry Limited (NYSE:BB) based on those filings.
Is BB stock a buy? BlackBerry Limited (NYSE:BB) was in 31 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BB investors should pay attention to an increase in hedge fund sentiment in recent months. There were 24 hedge funds in our database with BB positions at the end of the third quarter. Our calculations also showed that BB isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 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.
Prem Watsa of Fairfax Financial Holdings
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Now we're going to review the fresh hedge fund action encompassing BlackBerry Limited (NYSE:BB).
Do Hedge Funds Think BB Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from one quarter earlier. On the other hand, there were a total of 27 hedge funds with a bullish position in BB a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Fairfax Financial Holdings held the most valuable stake in BlackBerry Limited (NYSE:BB), which was worth $309.7 million at the end of the fourth quarter. On the second spot was Arrowstreet Capital which amassed $56.2 million worth of shares. Kahn Brothers, Electron Capital Partners, and D E Shaw 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 Fairfax Financial Holdings allocated the biggest weight to BlackBerry Limited (NYSE:BB), around 13.77% of its 13F portfolio. Kahn Brothers is also relatively very bullish on the stock, earmarking 5.47 percent of its 13F equity portfolio to BB.
Consequently, some big names have been driving this bullishness. Electron Capital Partners, managed by Jos Shaver, initiated the most outsized position in BlackBerry Limited (NYSE:BB). Electron Capital Partners had $17 million invested in the company at the end of the quarter. William Heard's Heard Capital also initiated a $7.3 million position during the quarter. The other funds with brand new BB positions are Warren Lammert's Granite Point Capital, Crispin Odey's Odey Asset Management Group, and Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital).
Let's now take a look at hedge fund activity in other stocks similar to BlackBerry Limited (NYSE:BB). These stocks are Balchem Corporation (NASDAQ:BCPC), Select Medical Holdings Corporation (NYSE:SEM), Ryman Hospitality Properties, Inc. (NYSE:RHP), Bandwidth Inc. (NASDAQ:BAND), Valmont Industries, Inc. (NYSE:VMI), Advanced Energy Industries, Inc. (NASDAQ:AEIS), and Gates Industrial Corporation plc (NYSE:GTES). This group of stocks' market values are similar to BB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BCPC,13,64821,-3 SEM,15,111337,-7 RHP,20,470531,-4 BAND,31,314329,1 VMI,26,392471,0 AEIS,22,120695,1 GTES,14,42276,0 Average,20.1,216637,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $479 million in BB's case. Bandwidth Inc. (NASDAQ:BAND) is the most popular stock in this table. On the other hand Balchem Corporation (NASDAQ:BCPC) is the least popular one with only 13 bullish hedge fund positions. BlackBerry Limited (NYSE:BB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BB is 90. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on BB as the stock returned 36.2% since the end of Q4 (through 4/12) 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.