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Is BJRI A Good Stock To Buy Now?

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  • BJRI

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider BJ's Restaurants, Inc. (NASDAQ:BJRI) for your portfolio? We'll look to this invaluable collective wisdom for the answer.

Is BJRI a good stock to buy now? BJ's Restaurants, Inc. (NASDAQ:BJRI) has seen an increase in support from the world's most elite money managers of late. BJ's Restaurants, Inc. (NASDAQ:BJRI) was in 14 hedge funds' portfolios at the end of September. The all time high for this statistic is 21. Our calculations also showed that BJRI 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.

Robert Pohly of Samlyn 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. Now let's take a gander at the latest hedge fund action regarding BJ's Restaurants, Inc. (NASDAQ:BJRI).

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

Heading into the fourth quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in BJRI a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in BJ's Restaurants, Inc. (NASDAQ:BJRI) was held by Fisher Asset Management, which reported holding $10.9 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $10.8 million position. Other investors bullish on the company included Royce & Associates, Samlyn Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Factorial Partners allocated the biggest weight to BJ's Restaurants, Inc. (NASDAQ:BJRI), around 0.46% of its 13F portfolio. Quantamental Technologies is also relatively very bullish on the stock, setting aside 0.17 percent of its 13F equity portfolio to BJRI.

As aggregate interest increased, key money managers have been driving this bullishness. Fisher Asset Management, managed by Ken Fisher, created the most outsized position in BJ's Restaurants, Inc. (NASDAQ:BJRI). Fisher Asset Management had $10.9 million invested in the company at the end of the quarter. Chuck Royce's Royce & Associates also made a $9.9 million investment in the stock during the quarter. The other funds with brand new BJRI positions are Matthew Hulsizer's PEAK6 Capital Management, Israel Englander's Millennium Management, and Ran Pang's Quantamental Technologies.

Let's now review hedge fund activity in other stocks similar to BJ's Restaurants, Inc. (NASDAQ:BJRI). These stocks are Photronics, Inc. (NASDAQ:PLAB), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), Nexgen Energy Ltd. (NYSE:NXE), Scorpio Tankers Inc. (NYSE:STNG), TPG RE Finance Trust, Inc. (NYSE:TRTX), Hibbett Sports, Inc. (NASDAQ:HIBB), and Sculptor Capital Management, Inc. (NYSE:SCU). All of these stocks' market caps resemble BJRI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PLAB,20,74020,-1 AXL,22,59546,2 NXE,6,28476,-1 STNG,14,30314,-4 TRTX,13,74230,-1 HIBB,21,181894,0 SCU,13,60894,3 Average,15.6,72768,-0.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.6 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $44 million in BJRI's case. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Nexgen Energy Ltd. (NYSE:NXE) is the least popular one with only 6 bullish hedge fund positions. BJ's Restaurants, Inc. (NASDAQ:BJRI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BJRI is 52. 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. A small number of hedge funds were also right about betting on BJRI as the stock returned 15.2% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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