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Is Hasbro, Inc. (HAS) Going To Burn These Hedge Funds ?

Reymerlyn Martin

We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Hasbro, Inc. (NASDAQ:HAS).

Hasbro, Inc. (NASDAQ:HAS) investors should pay attention to an increase in hedge fund interest in recent months. HAS was in 29 hedge funds' portfolios at the end of the third quarter of 2019. There were 24 hedge funds in our database with HAS positions at the end of the previous quarter. Our calculations also showed that HAS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

According to most market participants, hedge funds are viewed as slow, old financial tools of the past. While there are over 8000 funds trading today, Our experts choose to focus on the top tier of this group, approximately 750 funds. These money managers have their hands on bulk of the smart money's total capital, and by shadowing their inimitable equity investments, Insider Monkey has figured out many investment strategies that have historically outstripped the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year 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_193030" align="aligncenter" width="600"] Tom Gayner of Markel Gayner Asset Management[/caption]

Tom Gayner

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to review the recent hedge fund action surrounding Hasbro, Inc. (NASDAQ:HAS).

How have hedgies been trading Hasbro, Inc. (NASDAQ:HAS)?

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HAS over the last 17 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HAS_dec2019

The largest stake in Hasbro, Inc. (NASDAQ:HAS) was held by AQR Capital Management, which reported holding $89.6 million worth of stock at the end of September. It was followed by Balyasny Asset Management with a $54.5 million position. Other investors bullish on the company included Melvin Capital Management, Markel Gayner Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Sabrepoint Capital allocated the biggest weight to Hasbro, Inc. (NASDAQ:HAS), around 4.76% of its portfolio. BeaconLight Capital is also relatively very bullish on the stock, dishing out 4.74 percent of its 13F equity portfolio to HAS.

As one would reasonably expect, key money managers have jumped into Hasbro, Inc. (NASDAQ:HAS) headfirst. Melvin Capital Management, managed by Gabriel Plotkin, created the most outsized position in Hasbro, Inc. (NASDAQ:HAS). Melvin Capital Management had $44.5 million invested in the company at the end of the quarter. David E. Shaw's D E Shaw also made a $21.3 million investment in the stock during the quarter. The following funds were also among the new HAS investors: Principal Global Investors's Columbus Circle Investors, Brandon Haley's Holocene Advisors, and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Hasbro, Inc. (NASDAQ:HAS) but similarly valued. These stocks are Akamai Technologies, Inc. (NASDAQ:AKAM), Twilio Inc. (NYSE:TWLO), Conagra Brands, Inc. (NYSE:CAG), and Waters Corporation (NYSE:WAT). This group of stocks' market caps are closest to HAS's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AKAM,27,810658,-6 TWLO,59,2259864,-4 CAG,27,681948,3 WAT,25,595467,-1 Average,34.5,1086984,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.5 hedge funds with bullish positions and the average amount invested in these stocks was $1087 million. That figure was $432 million in HAS's case. Twilio Inc. (NYSE:TWLO) is the most popular stock in this table. On the other hand Waters Corporation (NYSE:WAT) is the least popular one with only 25 bullish hedge fund positions. Hasbro, Inc. (NASDAQ:HAS) 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HAS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HAS investors were disappointed as the stock returned -13.7% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

Disclosure: None. This article was originally published at Insider Monkey.

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