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Hedge Funds Are Buying Ballantyne Strong Inc (BTN)

·6 min read

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Ballantyne Strong Inc (NYSE:BTN).

Ballantyne Strong Inc (NYSE:BTN) shareholders have witnessed an increase in enthusiasm from smart money of late. Ballantyne Strong Inc (NYSE:BTN) was in 4 hedge funds' portfolios at the end of March. The all time high for this statistic is 5. There were 2 hedge funds in our database with BTN holdings at the end of December. Our calculations also showed that BTN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

John Rogers’ Top 10 Stock Picks
John Rogers’ Top 10 Stock Picks

John Rogers of Ariel Investments

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we're going to check out the recent hedge fund action encompassing Ballantyne Strong Inc (NYSE:BTN).

Do Hedge Funds Think BTN Is A Good Stock To Buy Now?

At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BTN over the last 23 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

Is BTN A Good Stock To Buy?
Is BTN A Good Stock To Buy?

According to Insider Monkey's hedge fund database, Renaissance Technologies, holds the biggest position in Ballantyne Strong Inc (NYSE:BTN). Renaissance Technologies has a $2.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is John W. Rogers of Ariel Investments, with a $1.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish comprise Ken Griffin's Citadel Investment Group, and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Ariel Investments allocated the biggest weight to Ballantyne Strong Inc (NYSE:BTN), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0032 percent of its 13F equity portfolio to BTN.

As one would reasonably expect, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, assembled the biggest position in Ballantyne Strong Inc (NYSE:BTN). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0.1 million position during the quarter. The only other fund with a brand new BTN position is John Overdeck and David Siegel's Two Sigma Advisors.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Ballantyne Strong Inc (NYSE:BTN) but similarly valued. These stocks are Mid-Southern Bancorp, Inc. (NASDAQ:MSVB), ShiftPixy, Inc. (NASDAQ:PIXY), Virios Therapeutics, Inc. (NASDAQ:VIRI), NLS Pharmaceutics AG (NASDAQ:NLSP), Tremont Mortgage Trust (NASDAQ:TRMT), Broadway Financial Corporation (NASDAQ:BYFC), and Comstock Holding Companies, Inc. (NASDAQ:CHCI). This group of stocks' market values resemble BTN's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MSVB,3,3599,-1 PIXY,4,583,2 VIRI,3,3782,1 NLSP,3,799,3 TRMT,3,1284,1 BYFC,3,1142,-1 CHCI,2,2312,-1 Average,3,1929,0.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $4 million in BTN's case. ShiftPixy, Inc. (NASDAQ:PIXY) is the most popular stock in this table. On the other hand Comstock Holding Companies, Inc. (NASDAQ:CHCI) is the least popular one with only 2 bullish hedge fund positions. Ballantyne Strong Inc (NYSE:BTN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BTN is 81. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Hedge funds were also right about betting on BTN as the stock returned 80.1% since the end of Q1 (through 6/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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