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Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don't make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards The Blackstone Group Inc. (NYSE:BX) to find out whether there were any major changes in hedge funds' views.
Is BX stock a buy or sell? The Blackstone Group Inc. (NYSE:BX) has seen an increase in hedge fund interest recently. The Blackstone Group Inc. (NYSE:BX) was in 54 hedge funds' portfolios at the end of December. The all time high for this statistic is 49. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BX isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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Daniel Sundheim of D1 Capital Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock that will deliver a 10x return. 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 homepage (or at the end of this article). Keeping this in mind we're going to check out the recent hedge fund action regarding The Blackstone Group Inc. (NYSE:BX).
Do Hedge Funds Think BX Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 54 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the third quarter of 2020. On the other hand, there were a total of 47 hedge funds with a bullish position in BX 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 The Blackstone Group Inc. (NYSE:BX) was held by Farallon Capital, which reported holding $252.2 million worth of stock at the end of December. It was followed by D E Shaw with a $138.3 million position. Other investors bullish on the company included Cryder Capital, Millennium Management, and Egerton Capital Limited. In terms of the portfolio weights assigned to each position Heard Capital allocated the biggest weight to The Blackstone Group Inc. (NYSE:BX), around 9.84% of its 13F portfolio. Cryder Capital is also relatively very bullish on the stock, designating 9.39 percent of its 13F equity portfolio to BX.
With a general bullishness amongst the heavyweights, key money managers have jumped into The Blackstone Group Inc. (NYSE:BX) headfirst. D1 Capital Partners, managed by Daniel Sundheim, created the most outsized position in The Blackstone Group Inc. (NYSE:BX). D1 Capital Partners had $81.7 million invested in the company at the end of the quarter. Renaissance Technologies also made a $45.2 million investment in the stock during the quarter. The other funds with brand new BX positions are James Parsons's Junto Capital Management, Dmitry Balyasny's Balyasny Asset Management, and Alex von Furstenberg and Mal Serure's Arrow Capital Management.
Let's also examine hedge fund activity in other stocks similar to The Blackstone Group Inc. (NYSE:BX). These stocks are NXP Semiconductors NV (NASDAQ:NXPI), Peloton Interactive, Inc. (NASDAQ:PTON), Vodafone Group Plc (NASDAQ:VOD), Palantir Technologies Inc. (NYSE:PLTR), Cognizant Technology Solutions Corp (NASDAQ:CTSH), Ross Stores, Inc. (NASDAQ:ROST), and Twitter Inc (NYSE:TWTR). This group of stocks' market values are similar to BX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NXPI,66,2259680,-2 PTON,63,5666462,5 VOD,17,745457,-5 PLTR,38,1902514,7 CTSH,46,3517450,1 ROST,57,1308907,11 TWTR,78,2777387,3 Average,52.1,2596837,2.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 52.1 hedge funds with bullish positions and the average amount invested in these stocks was $2597 million. That figure was $1450 million in BX's case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Vodafone Group Plc (NASDAQ:VOD) is the least popular one with only 17 bullish hedge fund positions. The Blackstone Group Inc. (NYSE:BX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BX is 70.3. 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 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on BX as the stock returned 13.4% since the end of Q4 (through 3/19) 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.