The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 28 holdings, data that is available nowhere else. Should you consider Bright Horizons Family Solutions Inc (NYSE:BFAM) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Bright Horizons Family Solutions Inc (NYSE:BFAM) was in 20 hedge funds' portfolios at the end of June. BFAM investors should pay attention to an increase in activity from the world's largest hedge funds lately. There were 18 hedge funds in our database with BFAM holdings at the end of the previous quarter. Our calculations also showed that BFAM isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are several metrics stock traders can use to analyze stocks. Some of the most underrated metrics are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform their index-focused peers by a solid amount (see the details here).
Unlike this former hedge fund manager 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 glance at the latest hedge fund action surrounding Bright Horizons Family Solutions Inc (NYSE:BFAM).
What have hedge funds been doing with Bright Horizons Family Solutions Inc (NYSE:BFAM)?
Heading into the third quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in BFAM a year ago. With hedgies' capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
The largest stake in Bright Horizons Family Solutions Inc (NYSE:BFAM) was held by Marshall Wace LLP, which reported holding $99.9 million worth of stock at the end of March. It was followed by Select Equity Group with a $57.4 million position. Other investors bullish on the company included D E Shaw, AQR Capital Management, and Bishop Rock Capital.
Consequently, key hedge funds have jumped into Bright Horizons Family Solutions Inc (NYSE:BFAM) headfirst. Millennium Management, managed by Israel Englander, created the biggest position in Bright Horizons Family Solutions Inc (NYSE:BFAM). Millennium Management had $10.4 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron's Algert Coldiron Investors also made a $2.4 million investment in the stock during the quarter. The following funds were also among the new BFAM investors: Richard Chilton's Chilton Investment Company, Jaime Sterne's Skye Global Management, and Louis Navellier's Navellier & Associates.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Bright Horizons Family Solutions Inc (NYSE:BFAM) but similarly valued. These stocks are China Eastern Airlines Corp. Ltd. (NYSE:CEA), Aramark (NYSE:ARMK), Bausch Health Companies Inc. (NYSE:BHC), and Molina Healthcare, Inc. (NYSE:MOH). This group of stocks' market valuations are closest to BFAM's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CEA,1,1064,0 ARMK,36,1026226,-2 BHC,31,1991352,0 MOH,32,1201084,2 Average,25,1054932,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $1055 million. That figure was $245 million in BFAM's case. Aramark (NYSE:ARMK) is the most popular stock in this table. On the other hand China Eastern Airlines Corp. Ltd. (NYSE:CEA) is the least popular one with only 1 bullish hedge fund positions. Bright Horizons Family Solutions Inc (NYSE:BFAM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately BFAM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BFAM investors were disappointed as the stock returned 1.1% during the third quarter 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 in 2019.
Disclosure: None. This article was originally published at Insider Monkey.