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 at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded BrightView Holdings, Inc. (NYSE:BV) and determine whether the smart money was really smart about this stock.
Is BrightView Holdings, Inc. (NYSE:BV) a buy, sell, or hold? Money managers were in an optimistic mood. The number of long hedge fund bets inched up by 10 lately. BrightView Holdings, Inc. (NYSE:BV) was in 18 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 24. Our calculations also showed that BV isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 8 hedge funds in our database with BV positions at the end of the first quarter. 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 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.
Israel Englander of Millennium Management
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 10 most profitable companies in the world 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 to get excerpts of these letters in your inbox. With all of this in mind we're going to review the recent hedge fund action surrounding BrightView Holdings, Inc. (NYSE:BV).
How have hedgies been trading BrightView Holdings, Inc. (NYSE:BV)?
At Q2's end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 125% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in BV 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, MSDC Management, managed by Marc Lisker, Glenn Fuhrman and John Phelan, holds the number one position in BrightView Holdings, Inc. (NYSE:BV). MSDC Management has a $132.3 million position in the stock, comprising 33.7% of its 13F portfolio. Sitting at the No. 2 spot is Engine Capital, led by Arnaud Ajdler, holding a $9.4 million position; the fund has 5.4% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish include Jonathan Barrett and Paul Segal's Luminus Management, Paul Tudor Jones's Tudor Investment Corp and Joseph Samuels's Islet Management. In terms of the portfolio weights assigned to each position MSDC Management allocated the biggest weight to BrightView Holdings, Inc. (NYSE:BV), around 33.73% of its 13F portfolio. Engine Capital is also relatively very bullish on the stock, dishing out 5.41 percent of its 13F equity portfolio to BV.
As industrywide interest jumped, some big names have jumped into BrightView Holdings, Inc. (NYSE:BV) headfirst. Luminus Management, managed by Jonathan Barrett and Paul Segal, established the most outsized position in BrightView Holdings, Inc. (NYSE:BV). Luminus Management had $5.2 million invested in the company at the end of the quarter. David Costen Haley's HBK Investments also made a $3.4 million investment in the stock during the quarter. The other funds with brand new BV positions are Israel Englander's Millennium Management, Paul Marshall and Ian Wace's Marshall Wace LLP, and Jeffrey Talpins's Element Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as BrightView Holdings, Inc. (NYSE:BV) but similarly valued. These stocks are Middlesex Water Company (NASDAQ:MSEX), Fresh Del Monte Produce Inc (NYSE:FDP), Atrion Corporation (NASDAQ:ATRI), Transocean Ltd (NYSE:RIG), HeadHunter Group PLC (NASDAQ:HHR), Genworth Financial Inc (NYSE:GNW), and Safety Insurance Group, Inc. (NASDAQ:SAFT). This group of stocks' market values are closest to BV's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MSEX,5,46852,-2 FDP,11,28532,5 ATRI,12,64691,0 RIG,21,59976,0 HHR,5,36640,0 GNW,36,164489,4 SAFT,13,41971,1 Average,14.7,63307,1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $174 million in BV's case. Genworth Financial Inc (NYSE:GNW) is the most popular stock in this table. On the other hand Middlesex Water Company (NASDAQ:MSEX) is the least popular one with only 5 bullish hedge fund positions. BrightView Holdings, Inc. (NYSE:BV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BV is 53.5. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately BV wasn't nearly as popular as these 10 stocks and hedge funds that were betting on BV were disappointed as the stock returned 1.8% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.