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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Brunswick Corporation (NYSE:BC) based on that data.
Is BC stock a buy? Prominent investors were buying. The number of long hedge fund bets moved up by 2 in recent months. Brunswick Corporation (NYSE:BC) was in 36 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 36. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BC isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
Ian Wace of Marshall Wace
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy 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. With all of this in mind we're going to take a glance at the fresh hedge fund action surrounding Brunswick Corporation (NYSE:BC).
Do Hedge Funds Think BC Is A Good Stock To Buy Now?
At fourth quarter's end, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BC over the last 22 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Brunswick Corporation (NYSE:BC) was held by Cantillon Capital Management, which reported holding $311.5 million worth of stock at the end of December. It was followed by Arrowstreet Capital with a $140.3 million position. Other investors bullish on the company included Kensico Capital, Lakewood Capital Management, and Levin Capital Strategies. In terms of the portfolio weights assigned to each position Manatuck Hill Partners allocated the biggest weight to Brunswick Corporation (NYSE:BC), around 4.72% of its 13F portfolio. MD Sass is also relatively very bullish on the stock, designating 3.9 percent of its 13F equity portfolio to BC.
Consequently, key money managers were leading the bulls' herd. Capital Growth Management, managed by Ken Heebner, initiated the largest position in Brunswick Corporation (NYSE:BC). Capital Growth Management had $20.2 million invested in the company at the end of the quarter. Christian Leone's Luxor Capital Group also made a $16.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Steven Baughman's Divisar Capital, Ken Grossman and Glen Schneider's SG Capital Management, and Paul Tudor Jones's Tudor Investment Corp.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Brunswick Corporation (NYSE:BC) but similarly valued. We will take a look at YETI Holdings, Inc. (NYSE:YETI), Nevro Corp (NYSE:NVRO), FirstService Corporation (TSE:FSV), Continental Resources, Inc. (NYSE:CLR), American Well Corporation (NYSE:AMWL), Tandem Diabetes Care Inc (NASDAQ:TNDM), and Sonoco Products Company (NYSE:SON). This group of stocks' market caps resemble BC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position YETI,19,128386,-10 NVRO,30,860171,-4 FSV,16,232365,4 CLR,29,156196,4 AMWL,19,227459,-6 TNDM,26,231853,-4 SON,20,124098,-9 Average,22.7,280075,-3.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.7 hedge funds with bullish positions and the average amount invested in these stocks was $280 million. That figure was $916 million in BC's case. Nevro Corp (NYSE:NVRO) is the most popular stock in this table. On the other hand FirstService Corporation (TSE:FSV) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Brunswick Corporation (NYSE:BC) is more popular among hedge funds. Our overall hedge fund sentiment score for BC is 87. 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 returned 7.9% in 2021 through April 1st but still managed to beat the market by 0.4 percentage points. Hedge funds were also right about betting on BC as the stock returned 27.5% since the end of December (through 4/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.