The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards BJ's Restaurants, Inc. (NASDAQ:BJRI).
Is BJ's Restaurants, Inc. (NASDAQ:BJRI) the right investment to pursue these days? Investors who are in the know are taking a bearish view. The number of long hedge fund positions retreated by 5 lately. Our calculations also showed that BJRI isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). BJRI was in 9 hedge funds' portfolios at the end of the third quarter of 2019. There were 14 hedge funds in our database with BJRI positions at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_746830" align="aligncenter" width="1613"] Matthew Hulsizer of PEAK6 Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let's take a look at the fresh hedge fund action regarding BJ's Restaurants, Inc. (NASDAQ:BJRI).
How are hedge funds trading BJ's Restaurants, Inc. (NASDAQ:BJRI)?
Heading into the fourth quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -36% from the second quarter of 2019. By comparison, 20 hedge funds held shares or bullish call options in BJRI a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Israel Englander's Millennium Management has the number one position in BJ's Restaurants, Inc. (NASDAQ:BJRI), worth close to $46 million, corresponding to 0.1% of its total 13F portfolio. The second largest stake is held by Marshall Wace, managed by Paul Marshall and Ian Wace, which holds a $13.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish encompass Noam Gottesman's GLG Partners, Elise Di Vincenzo Crumbine's Stormborn Capital Management and Matthew Hulsizer's PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Harvest Capital Strategies allocated the biggest weight to BJ's Restaurants, Inc. (NASDAQ:BJRI), around 3.01% of its 13F portfolio. Stormborn Capital Management is also relatively very bullish on the stock, designating 3 percent of its 13F equity portfolio to BJRI.
Since BJ's Restaurants, Inc. (NASDAQ:BJRI) has witnessed bearish sentiment from hedge fund managers, it's safe to say that there was a specific group of fund managers that elected to cut their entire stakes heading into Q4. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dumped the largest stake of the "upper crust" of funds followed by Insider Monkey, valued at about $12.1 million in stock. John Overdeck and David Siegel's fund, Two Sigma Advisors, also sold off its stock, about $10.7 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 5 funds heading into Q4.
Let's now review hedge fund activity in other stocks similar to BJ's Restaurants, Inc. (NASDAQ:BJRI). These stocks are Vivint Solar Inc (NYSE:VSLR), Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), Tivity Health, Inc. (NASDAQ:TVTY), and Origin Bancorp, Inc. (NASDAQ:OBNK). This group of stocks' market valuations are closest to BJRI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VSLR,11,55263,0 CRZO,16,142584,6 TVTY,19,233416,3 OBNK,6,30331,2 Average,13,115399,2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $83 million in BJRI's case. Tivity Health, Inc. (NASDAQ:TVTY) is the most popular stock in this table. On the other hand Origin Bancorp, Inc. (NASDAQ:OBNK) is the least popular one with only 6 bullish hedge fund positions. BJ's Restaurants, Inc. (NASDAQ:BJRI) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on BJRI, though not to the same extent, as the stock returned 6.3% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.