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At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not BrightView Holdings, Inc. (NYSE:BV) makes for a good investment right now.
Is BV a good stock to buy now? BrightView Holdings, Inc. (NYSE:BV) has seen a decrease in activity from the world's largest hedge funds recently. BrightView Holdings, Inc. (NYSE:BV) was in 15 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 24. Our calculations also showed that BV 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.
If you'd ask most investors, hedge funds are seen as slow, outdated investment tools of the past. While there are greater than 8000 funds trading at present, We choose to focus on the crème de la crème of this group, around 850 funds. These hedge fund managers oversee the lion's share of the smart money's total capital, and by paying attention to their inimitable stock picks, Insider Monkey has deciphered numerous investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Arnaud Ajdler of Engine Capital
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. Now let's go over the recent hedge fund action regarding BrightView Holdings, Inc. (NYSE:BV).
Do Hedge Funds Think BV Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. By comparison, 11 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.
Among these funds, MSDC Management held the most valuable stake in BrightView Holdings, Inc. (NYSE:BV), which was worth $134.7 million at the end of the third quarter. On the second spot was Engine Capital which amassed $6.2 million worth of shares. Arrowstreet Capital, Tudor Investment Corp, and Islet 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 MSDC Management allocated the biggest weight to BrightView Holdings, Inc. (NYSE:BV), around 28.19% of its 13F portfolio. Engine Capital is also relatively very bullish on the stock, dishing out 3.11 percent of its 13F equity portfolio to BV.
Since BrightView Holdings, Inc. (NYSE:BV) has witnessed a decline in interest from the aggregate hedge fund industry, it's easy to see that there were a few money managers who sold off their entire stakes by the end of the third quarter. Interestingly, Jonathan Barrett and Paul Segal's Luminus Management cut the largest stake of all the hedgies watched by Insider Monkey, worth about $5.2 million in stock, and David Costen Haley's HBK Investments was right behind this move, as the fund said goodbye to about $3.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds by the end of the third quarter.
Let's check out hedge fund activity in other stocks similar to BrightView Holdings, Inc. (NYSE:BV). We will take a look at Argo Group International Holdings, Ltd. (NYSE:ARGO), Viper Energy Partners LP (NASDAQ:VNOM), TowneBank (NASDAQ:TOWN), INMODE LTD. (NASDAQ:INMD), Inter Parfums, Inc. (NASDAQ:IPAR), Cinemark Holdings, Inc. (NYSE:CNK), and First Financial Bancorp (NASDAQ:FFBC). All of these stocks' market caps match BV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARGO,17,175959,0 VNOM,11,26145,1 TOWN,12,28509,3 INMD,16,111188,5 IPAR,17,61695,2 CNK,25,150590,1 FFBC,16,20797,3 Average,16.3,82126,2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $157 million in BV's case. Cinemark Holdings, Inc. (NYSE:CNK) is the most popular stock in this table. On the other hand Viper Energy Partners LP (NASDAQ:VNOM) is the least popular one with only 11 bullish hedge fund positions. BrightView Holdings, Inc. (NYSE:BV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BV is 35. 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 December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on BV as the stock returned 23.5% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.