Is The Boston Beer Company Inc (NYSE:SAM) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
The Boston Beer Company Inc (NYSE:SAM) was in 29 hedge funds' portfolios at the end of the third quarter of 2019. SAM shareholders have witnessed an increase in enthusiasm from smart money of late. There were 23 hedge funds in our database with SAM holdings at the end of the previous quarter. Our calculations also showed that SAM 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.
According to most stock holders, hedge funds are seen as underperforming, old investment tools of yesteryear. While there are more than 8000 funds in operation at the moment, We choose to focus on the upper echelon of this group, approximately 750 funds. These money managers have their hands on the lion's share of the hedge fund industry's total asset base, and by shadowing their finest picks, Insider Monkey has revealed various investment strategies that have historically outperformed the market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually 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_30621" align="aligncenter" width="487"] Cliff Asness of AQR Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds' buy/sell signals. Let's take a look at the fresh hedge fund action surrounding The Boston Beer Company Inc (NYSE:SAM).
What have hedge funds been doing with The Boston Beer Company Inc (NYSE:SAM)?
At Q3's end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 26% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in SAM a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies holds the largest position in The Boston Beer Company Inc (NYSE:SAM). Renaissance Technologies has a $151.1 million position in the stock, comprising 0.1% of its 13F portfolio. On Renaissance Technologies's heels is AQR Capital Management, led by Cliff Asness, holding a $115.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Ken Griffin's Citadel Investment Group, Ken Fisher's Fisher Asset Management and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Moore Global Investments allocated the biggest weight to The Boston Beer Company Inc (NYSE:SAM), around 0.58% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, earmarking 0.36 percent of its 13F equity portfolio to SAM.
As industrywide interest jumped, key money managers were leading the bulls' herd. Millennium Management, managed by Israel Englander, initiated the most outsized call position in The Boston Beer Company Inc (NYSE:SAM). Millennium Management had $20 million invested in the company at the end of the quarter. Louis Bacon's Moore Global Investments also made a $14.6 million investment in the stock during the quarter. The other funds with brand new SAM positions are Andrew Sandler's Sandler Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Matthew Tewksbury's Stevens Capital Management.
Let's now review hedge fund activity in other stocks similar to The Boston Beer Company Inc (NYSE:SAM). We will take a look at Helmerich & Payne, Inc. (NYSE:HP), Assured Guaranty Ltd. (NYSE:AGO), China Biologic Products Holdings, Inc. (NASDAQ:CBPO), and Pinnacle Financial Partners, Inc. (NASDAQ:PNFP). This group of stocks' market caps are closest to SAM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HP,28,270247,-5 AGO,35,576379,-1 CBPO,14,504724,5 PNFP,15,84557,-3 Average,23,358977,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $359 million. That figure was $661 million in SAM's case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand China Biologic Products Holdings, Inc. (NASDAQ:CBPO) is the least popular one with only 14 bullish hedge fund positions. The Boston Beer Company Inc (NYSE:SAM) 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 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 SAM wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SAM were disappointed as the stock returned 5.6% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.