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Hedge Funds Have Never Been This Bullish On BrightSphere Investment Group Inc (BSIG)

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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. 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 BrightSphere Investment Group Inc (NYSE:BSIG).

BrightSphere Investment Group Inc (NYSE:BSIG) was in 30 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 29. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BSIG investors should be aware of an increase in activity from the world's largest hedge funds in recent months. There were 29 hedge funds in our database with BSIG holdings at the end of June. Our calculations also showed that BSIG isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let's take a gander at the latest hedge fund action surrounding BrightSphere Investment Group Inc (NYSE:BSIG).

PAULSON & CO
PAULSON & CO

John Paulson of Paulson & Co

Do Hedge Funds Think BSIG Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in BSIG over the last 25 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in BrightSphere Investment Group Inc (NYSE:BSIG) was held by Paulson & Co, which reported holding $522.6 million worth of stock at the end of September. It was followed by Azora Capital with a $76.6 million position. Other investors bullish on the company included Balyasny Asset Management, Arrowstreet Capital, and Schonfeld Strategic Advisors. In terms of the portfolio weights assigned to each position Paulson & Co allocated the biggest weight to BrightSphere Investment Group Inc (NYSE:BSIG), around 14.89% of its 13F portfolio. Toscafund Asset Management is also relatively very bullish on the stock, earmarking 9.41 percent of its 13F equity portfolio to BSIG.

As industrywide interest jumped, key hedge funds have jumped into BrightSphere Investment Group Inc (NYSE:BSIG) headfirst. Mangrove Partners, managed by Nathaniel August, established the biggest position in BrightSphere Investment Group Inc (NYSE:BSIG). Mangrove Partners had $6.4 million invested in the company at the end of the quarter. Usman Waheed's Strycker View Capital also made a $5.6 million investment in the stock during the quarter. The other funds with brand new BSIG positions are Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital) and Mika Toikka's AlphaCrest Capital Management.

Let's go over hedge fund activity in other stocks similar to BrightSphere Investment Group Inc (NYSE:BSIG). We will take a look at Raven Industries, Inc. (NASDAQ:RAVN), Grocery Outlet Holding Corp. (NASDAQ:GO), Myovant Sciences Ltd. (NYSE:MYOV), Zuora, Inc. (NYSE:ZUO), SmileDirectClub, Inc. (NASDAQ:SDC), Morphic Holding, Inc. (NASDAQ:MORF), and Enerplus Corp (NYSE:ERF). This group of stocks' market caps resemble BSIG's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RAVN,17,315196,-5 GO,19,78826,6 MYOV,13,40733,-5 ZUO,23,190078,-4 SDC,18,58711,-1 MORF,21,406257,2 ERF,18,169795,0 Average,18.4,179942,-1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was $904 million in BSIG's case. Zuora, Inc. (NYSE:ZUO) is the most popular stock in this table. On the other hand Myovant Sciences Ltd. (NYSE:MYOV) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks BrightSphere Investment Group Inc (NYSE:BSIG) is more popular among hedge funds. Our overall hedge fund sentiment score for BSIG is 86. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on BSIG as the stock returned 14.9% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.