At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Boston Private Financial Holdings, Inc. (NASDAQ:BPFH).
Is Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) an attractive stock to buy now? Prominent investors are getting less bullish. The number of long hedge fund bets were cut by 2 in recent months. Our calculations also showed that BPFH isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: 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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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_845793" align="aligncenter" width="392"] Peter Rathjens of Arrowstreet Capital[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to go over the new hedge fund action regarding Boston Private Financial Holdings, Inc. (NASDAQ:BPFH).
What does smart money think about Boston Private Financial Holdings, Inc. (NASDAQ:BPFH)?
At Q1's end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BPFH over the last 18 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Select Equity Group, managed by Robert Joseph Caruso, holds the most valuable position in Boston Private Financial Holdings, Inc. (NASDAQ:BPFH). Select Equity Group has a $12.3 million position in the stock, comprising 0.1% of its 13F portfolio. On Select Equity Group's heels is Renaissance Technologies, with a $6.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism contain Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Mario Gabelli's GAMCO Investors and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Select Equity Group allocated the biggest weight to Boston Private Financial Holdings, Inc. (NASDAQ:BPFH), around 0.08% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, setting aside 0.05 percent of its 13F equity portfolio to BPFH.
Judging by the fact that Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) has experienced bearish sentiment from the smart money, we can see that there was a specific group of hedge funds who sold off their full holdings last quarter. At the top of the heap, Israel Englander's Millennium Management sold off the largest stake of all the hedgies tracked by Insider Monkey, worth close to $9.1 million in stock, and Joshua Nash's Ulysses Management was right behind this move, as the fund dropped about $1.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.
Let's go over hedge fund activity in other stocks similar to Boston Private Financial Holdings, Inc. (NASDAQ:BPFH). These stocks are Seabridge Gold, Inc. (NYSE:SA), Griffon Corporation (NYSE:GFF), China Online Education Group (NYSE:COE), and Malibu Boats Inc (NASDAQ:MBUU). This group of stocks' market values resemble BPFH's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SA,7,28075,1 GFF,13,73402,1 COE,4,19972,1 MBUU,16,71820,0 Average,10,48317,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $37 million in BPFH's case. Malibu Boats Inc (NASDAQ:MBUU) is the most popular stock in this table. On the other hand China Online Education Group (NYSE:COE) is the least popular one with only 4 bullish hedge fund positions. Boston Private Financial Holdings, Inc. (NASDAQ:BPFH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but beat the market by 16.8 percentage points. Unfortunately BPFH wasn't nearly as popular as these 10 stocks and hedge funds that were betting on BPFH were disappointed as the stock returned -6.3% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.