Is Broadwind Energy Inc. (BWEN) Going To Burn These Hedge Funds ?
With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Broadwind Energy Inc. (NASDAQ:BWEN).
Broadwind Energy Inc. (NASDAQ:BWEN) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds' portfolios at the end of the third quarter of 2019. At the end of this article we will also compare BWEN to other stocks including BioLineRx Ltd. (NASDAQ:BLRX), 1347 Property Insurance Holdings, Inc. (NASDAQ:PIH), and WidePoint Corporation (NYSE:WYY) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are perceived as slow, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at present, We hone in on the leaders of this club, around 750 funds. These money managers oversee bulk of the hedge fund industry's total capital, and by observing their finest picks, Insider Monkey has brought to light a number of investment strategies that have historically exceeded the market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_699750" align="aligncenter" width="473"]
Gifford Combs of Dalton Investments[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Now let's check out the fresh hedge fund action surrounding Broadwind Energy Inc. (NASDAQ:BWEN).
What have hedge funds been doing with Broadwind Energy Inc. (NASDAQ:BWEN)?
At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 4 hedge funds held shares or bullish call options in BWEN 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.
More specifically, Renaissance Technologies was the largest shareholder of Broadwind Energy Inc. (NASDAQ:BWEN), with a stake worth $1.2 million reported as of the end of September. Trailing Renaissance Technologies was Tontine Asset Management, which amassed a stake valued at $0.2 million. Dalton Investments was 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 Tontine Asset Management allocated the biggest weight to Broadwind Energy Inc. (NASDAQ:BWEN), around 0.03% of its 13F portfolio. Dalton Investments is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to BWEN.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Broadwind Energy Inc. (NASDAQ:BWEN) but similarly valued. These stocks are BioLineRx Ltd. (NASDAQ:BLRX), 1347 Property Insurance Holdings, Inc. (NASDAQ:PIH), WidePoint Corporation (NYSE:WYY), and Aptevo Therapeutics Inc. (NASDAQ:APVO). This group of stocks' market valuations resemble BWEN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BLRX,4,6129,-1 PIH,4,4662,2 WYY,6,4510,2 APVO,7,3557,0 Average,5.25,4715,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $1 million in BWEN's case. Aptevo Therapeutics Inc. (NASDAQ:APVO) is the most popular stock in this table. On the other hand BioLineRx Ltd. (NASDAQ:BLRX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Broadwind Energy Inc. (NASDAQ:BWEN) is even less popular than BLRX. Hedge funds dodged a bullet by taking a bearish stance towards BWEN. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately BWEN wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BWEN investors were disappointed as the stock returned -13.6% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
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