Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is The Buckle, Inc. (NYSE:BKE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is The Buckle, Inc. (NYSE:BKE) undervalued? The best stock pickers are becoming more confident. The number of bullish hedge fund positions moved up by 3 in recent months. Our calculations also showed that BKE isn't among the 30 most popular stocks among hedge funds (see the video below). BKE was in 14 hedge funds' portfolios at the end of the second quarter of 2019. There were 11 hedge funds in our database with BKE holdings at the end of the previous quarter. 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 take a look at the key hedge fund action encompassing The Buckle, Inc. (NYSE:BKE).
What have hedge funds been doing with The Buckle, Inc. (NYSE:BKE)?
At the end of the second quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in BKE over the last 16 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Sprott Asset Management was the largest shareholder of The Buckle, Inc. (NYSE:BKE), with a stake worth $3.8 million reported as of the end of March. Trailing Sprott Asset Management was Royce & Associates, which amassed a stake valued at $3.6 million. AQR Capital Management, Two Sigma Advisors, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key money managers have been driving this bullishness. Renaissance Technologies created the most outsized position in The Buckle, Inc. (NYSE:BKE). Renaissance Technologies had $2.6 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also made a $0.7 million investment in the stock during the quarter. The other funds with brand new BKE positions are David Harding's Winton Capital Management and Hoon Kim's Quantinno Capital.
Let's now take a look at hedge fund activity in other stocks similar to The Buckle, Inc. (NYSE:BKE). We will take a look at Tenneco Inc (NYSE:TEN), Seabridge Gold, Inc. (NYSE:SA), EDENOR S.A. (NYSE:EDN), and DHT Holdings Inc (NYSE:DHT). This group of stocks' market caps resemble BKE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TEN,12,113355,-14 SA,9,37822,1 EDN,4,3437,-1 DHT,16,110442,0 Average,10.25,66264,-3.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $20 million in BKE's case. DHT Holdings Inc (NYSE:DHT) is the most popular stock in this table. On the other hand EDENOR S.A. (NYSE:EDN) is the least popular one with only 4 bullish hedge fund positions. The Buckle, Inc. (NYSE:BKE) 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 BKE as the stock returned 20.8% 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.