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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. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards Popular Inc (NASDAQ:BPOP).
Is BPOP stock a buy? Popular Inc (NASDAQ:BPOP) has experienced an increase in support from the world's most elite money managers of late. Popular Inc (NASDAQ:BPOP) was in 35 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BPOP 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).
Bernard Horn of Polaris Capital Management
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. Keeping this in mind we're going to analyze the fresh hedge fund action encompassing Popular Inc (NASDAQ:BPOP).
Do Hedge Funds Think BPOP Is A Good Stock To Buy Now?
At Q4's end, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from one quarter earlier. On the other hand, there were a total of 33 hedge funds with a bullish position in BPOP a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Polaris Capital Management, managed by Bernard Horn, holds the biggest position in Popular Inc (NASDAQ:BPOP). Polaris Capital Management has a $223.9 million position in the stock, comprising 8.4% of its 13F portfolio. On Polaris Capital Management's heels is Two Creeks Capital Management, managed by Ryan Pedlow, which holds a $129.3 million position; the fund has 7.1% of its 13F portfolio invested in the stock. Some other peers that are bullish encompass Ken Griffin's Citadel Investment Group, Cliff Asness's AQR Capital Management and Viraj Mehta's Arctis Global. In terms of the portfolio weights assigned to each position Arctis Global allocated the biggest weight to Popular Inc (NASDAQ:BPOP), around 9.52% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, dishing out 8.41 percent of its 13F equity portfolio to BPOP.
As industrywide interest jumped, key money managers have jumped into Popular Inc (NASDAQ:BPOP) headfirst. Arctis Global, managed by Viraj Mehta, established the largest position in Popular Inc (NASDAQ:BPOP). Arctis Global had $44.1 million invested in the company at the end of the quarter. Emanuel J. Friedman's EJF Capital also made a $21.7 million investment in the stock during the quarter. The other funds with new positions in the stock are David Rosen's Rubric Capital Management, Allon Hellmann's Full18 Capital, and Ray Dalio's Bridgewater Associates.
Let's check out hedge fund activity in other stocks similar to Popular Inc (NASDAQ:BPOP). These stocks are Beam Therapeutics Inc. (NASDAQ:BEAM), Saia Inc (NASDAQ:SAIA), 51job, Inc. (NASDAQ:JOBS), MSC Industrial Direct Co Inc (NYSE:MSM), Enstar Group Ltd. (NASDAQ:ESGR), Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC), and Asana Inc. (NYSE:ASAN). This group of stocks' market values are similar to BPOP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BEAM,14,806038,7 SAIA,16,241192,-4 JOBS,16,108550,6 MSM,18,340539,-4 ESGR,11,415318,-2 TKC,4,103675,-1 ASAN,18,323458,1 Average,13.9,334110,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $334 million. That figure was $876 million in BPOP's case. MSC Industrial Direct Co Inc (NYSE:MSM) is the most popular stock in this table. On the other hand Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Popular Inc (NASDAQ:BPOP) is more popular among hedge funds. Our overall hedge fund sentiment score for BPOP is 90. 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 BPOP as the stock returned 27.7% 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.