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Is BGFV A Good Stock To Buy Now?

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Abigail Fisher
·6 min read
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Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Big 5 Sporting Goods Corporation (NASDAQ:BGFV) in this article.

Is BGFV a good stock to buy now? Hedge funds were taking a bullish view. The number of bullish hedge fund bets rose by 3 recently. Big 5 Sporting Goods Corporation (NASDAQ:BGFV) was in 9 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 19. Our calculations also showed that BGFV 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 today’s marketplace there are a lot of indicators stock market investors employ to size up their holdings. A pair of the less known indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the broader indices by a significant amount (see the details here).

Thomas Claugus of GMT Capital

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 review the new hedge fund action surrounding Big 5 Sporting Goods Corporation (NASDAQ:BGFV).

Do Hedge Funds Think BGFV Is A Good Stock To Buy Now?

At the end of September, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BGFV over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, GMT Capital, managed by Thomas E. Claugus, holds the largest position in Big 5 Sporting Goods Corporation (NASDAQ:BGFV). GMT Capital has a $11.2 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $1.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions comprise Mario Gabelli's GAMCO Investors, Peter Muller's PDT Partners and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Southport Management allocated the biggest weight to Big 5 Sporting Goods Corporation (NASDAQ:BGFV), around 5.38% of its 13F portfolio. GMT Capital is also relatively very bullish on the stock, dishing out 0.81 percent of its 13F equity portfolio to BGFV.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into Big 5 Sporting Goods Corporation (NASDAQ:BGFV) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Big 5 Sporting Goods Corporation (NASDAQ:BGFV). Arrowstreet Capital had $1.9 million invested in the company at the end of the quarter. Peter Muller's PDT Partners also initiated a $0.9 million position during the quarter. The other funds with new positions in the stock are Mark Broach's Manatuck Hill Partners, Lee Ainslie's Maverick Capital, and Peter Algert's Algert Global.

Let's now review hedge fund activity in other stocks similar to Big 5 Sporting Goods Corporation (NASDAQ:BGFV). These stocks are IRSA Inversiones y Representaciones Sociedad Anónima (NYSE:IRS), Aquestive Therapeutics, Inc. (NASDAQ:AQST), Quad/Graphics, Inc. (NYSE:QUAD), Anworth Mortgage Asset Corporation (NYSE:ANH), Green Plains Partners LP (NASDAQ:GPP), Northrim BanCorp, Inc. (NASDAQ:NRIM), and Century Casinos, Inc. (NASDAQ:CNTY). This group of stocks' market values are similar to BGFV's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IRS,5,10713,0 AQST,8,11570,1 QUAD,8,8881,-3 ANH,11,24320,-1 GPP,2,14829,0 NRIM,11,13227,0 CNTY,10,23955,0 Average,7.9,15356,-0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.9 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $18 million in BGFV's case. Anworth Mortgage Asset Corporation (NYSE:ANH) is the most popular stock in this table. On the other hand Green Plains Partners LP (NASDAQ:GPP) is the least popular one with only 2 bullish hedge fund positions. Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BGFV is 61.1. 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 BGFV as the stock returned 23.3% 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.

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