The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Boston Omaha Corporation (NASDAQ:BOMN) based on those filings.
Boston Omaha Corporation (NASDAQ:BOMN) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds' portfolios at the end of the first quarter of 2020. At the end of this article we will also compare BOMN to other stocks including CEL-SCI Corporation (NYSE:CVM), Loma Negra Compania Industrial Argentina Sociedad Anonima (NYSE:LOMA), and PBF Logistics LP (NYSE:PBFX) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to check out the new hedge fund action regarding Boston Omaha Corporation (NASDAQ:BOMN).
Hedge fund activity in Boston Omaha Corporation (NASDAQ:BOMN)
At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BOMN over the last 18 quarters. With hedgies' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Magnolia Capital Fund, managed by Adam Peterson, holds the largest position in Boston Omaha Corporation (NASDAQ:BOMN). Magnolia Capital Fund has a $183.3 million position in the stock, comprising 28.9% of its 13F portfolio. On Magnolia Capital Fund's heels is Renaissance Technologies, holding a $0.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions comprise Murray Stahl's Horizon Asset Management, David Harding's Winton Capital Management and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Magnolia Capital Fund allocated the biggest weight to Boston Omaha Corporation (NASDAQ:BOMN), around 28.92% of its 13F portfolio. Horizon Asset Management is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to BOMN.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let's now take a look at hedge fund activity in other stocks similar to Boston Omaha Corporation (NASDAQ:BOMN). These stocks are CEL-SCI Corporation (NYSE:CVM), Loma Negra Compania Industrial Argentina Sociedad Anonima (NYSE:LOMA), PBF Logistics LP (NYSE:PBFX), and Geopark Ltd (NYSE:GPRK). This group of stocks' market caps match BOMN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CVM,5,10816,0 LOMA,12,30637,5 PBFX,3,870,0 GPRK,13,49368,2 Average,8.25,22923,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $185 million in BOMN's case. Geopark Ltd (NYSE:GPRK) is the most popular stock in this table. On the other hand PBF Logistics LP (NYSE:PBFX) is the least popular one with only 3 bullish hedge fund positions. Boston Omaha Corporation (NASDAQ:BOMN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately BOMN wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); BOMN investors were disappointed as the stock returned -9.9% during the second quarter 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.