We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Peltz's recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Bluegreen Vacations Corporation (NYSE:BXG).
Is Bluegreen Vacations (NYSE:BXG) a good stock to buy now? BXG has seen a decrease in activity from the world's largest hedge funds recently. Bluegreen Vacations Corporation (NYSE:BXG) was in 5 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 8. Our calculations also showed that BXG 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 several formulas market participants put to use to value their holdings. A duo of the most underrated formulas are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outclass the broader indices by a very impressive margin (see the details here).
Fred DiSanto of Ancora Advisors
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 analyze the fresh hedge fund action surrounding Bluegreen Vacations Corporation (NYSE:BXG).
What does smart money think about Bluegreen Vacations Corporation (NYSE:BXG)?
At third quarter's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -38% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in BXG a year ago. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Among these funds, Ancora Advisors held the most valuable stake in Bluegreen Vacations Corporation (NYSE:BXG), which was worth $0.6 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $0.4 million worth of shares. Renaissance Technologies, Citadel Investment Group, and Ionic Capital Management 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 Ancora Advisors allocated the biggest weight to Bluegreen Vacations Corporation (NYSE:BXG), around 0.02% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to BXG.
Because Bluegreen Vacations Corporation (NYSE:BXG) has faced declining sentiment from hedge fund managers, logic holds that there was a specific group of fund managers who sold off their entire stakes by the end of the third quarter. It's worth mentioning that Paul Marshall and Ian Wace's Marshall Wace LLP dumped the largest investment of all the hedgies watched by Insider Monkey, worth about $0.2 million in stock. Roger Ibbotson's fund, Zebra Capital Management, also sold off its stock, about $0.1 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Bluegreen Vacations Corporation (NYSE:BXG) but similarly valued. These stocks are Cardiff Oncology, Inc. (NASDAQ:CRDF), ShotSpotter, Inc. (NASDAQ:SSTI), Waitr Holdings Inc. (NASDAQ:WTRH), iBio, Inc. (NYSE:IBIO), The First of Long Island Corporation (NASDAQ:FLIC), Hoegh LNG Partners LP (NYSE:HMLP), and Customers Bancorp Inc (NYSE:CUBI). This group of stocks' market values are similar to BXG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRDF,17,113568,10 SSTI,10,27169,3 WTRH,13,62868,-4 IBIO,3,939,1 FLIC,10,22272,-1 HMLP,5,12459,0 CUBI,10,12964,-5 Average,9.7,36034,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $2 million in BXG's case. Cardiff Oncology, Inc. (NASDAQ:CRDF) is the most popular stock in this table. On the other hand iBio, Inc. (NYSE:IBIO) is the least popular one with only 3 bullish hedge fund positions. Bluegreen Vacations Corporation (NYSE:BXG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BXG is 27.9. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on BXG as the stock returned 30.4% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.