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 ACCO Brands Corporation (NYSE:ACCO).
ACCO Brands Corporation (NYSE:ACCO) was in 16 hedge funds' portfolios at the end of June. ACCO investors should pay attention to a decrease in enthusiasm from smart money of late. There were 18 hedge funds in our database with ACCO positions at the end of the previous quarter. Our calculations also showed that ACCO isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to 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 has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's go over the recent hedge fund action surrounding ACCO Brands Corporation (NYSE:ACCO).
What does smart money think about ACCO Brands Corporation (NYSE:ACCO)?
Heading into the third quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ACCO over the last 16 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of ACCO Brands Corporation (NYSE:ACCO), with a stake worth $13.8 million reported as of the end of March. Trailing D E Shaw was Arrowstreet Capital, which amassed a stake valued at $6.2 million. Renaissance Technologies, Two Sigma Advisors, and Ancora Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
Because ACCO Brands Corporation (NYSE:ACCO) has witnessed a decline in interest from the smart money, we can see that there is a sect of money managers who sold off their entire stakes last quarter. At the top of the heap, Glenn Russell Dubin's Highbridge Capital Management sold off the biggest stake of all the hedgies watched by Insider Monkey, totaling an estimated $0.5 million in stock. Thomas Bailard's fund, Bailard Inc, also cut its stock, about $0.5 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to ACCO Brands Corporation (NYSE:ACCO). We will take a look at TG Therapeutics Inc (NASDAQ:TGTX), Stamps.com Inc. (NASDAQ:STMP), Goldman Sachs BDC, Inc. (NYSE:GSBD), and Oritani Financial Corp. (NASDAQ:ORIT). This group of stocks' market valuations are closest to ACCO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TGTX,17,187351,0 STMP,19,216258,-10 GSBD,1,3395,0 ORIT,6,36758,-1 Average,10.75,110941,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $111 million. That figure was $38 million in ACCO's case. Stamps.com Inc. (NASDAQ:STMP) is the most popular stock in this table. On the other hand Goldman Sachs BDC, Inc. (NYSE:GSBD) is the least popular one with only 1 bullish hedge fund positions. ACCO Brands Corporation (NYSE:ACCO) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on ACCO as the stock returned 26.2% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.