In this article we will take a look at whether hedge funds think Banco BBVA Argentina S.A. (NYSE:BBAR) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Banco BBVA Argentina S.A. (NYSE:BBAR) has experienced a decrease in hedge fund interest in recent months. Our calculations also showed that BBAR 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_746830" align="aligncenter" width="395"] Matthew Hulsizer of PEAK6 Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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 view the fresh hedge fund action regarding Banco BBVA Argentina S.A. (NYSE:BBAR).
What have hedge funds been doing with Banco BBVA Argentina S.A. (NYSE:BBAR)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BBAR over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of Banco BBVA Argentina S.A. (NYSE:BBAR), with a stake worth $1.9 million reported as of the end of September. Trailing Arrowstreet Capital was Paloma Partners, which amassed a stake valued at $0.9 million. Renaissance Technologies, Two Sigma Advisors, and Autonomy Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Autonomy Capital allocated the biggest weight to Banco BBVA Argentina S.A. (NYSE:BBAR), around 0.09% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to BBAR.
Judging by the fact that Banco BBVA Argentina S.A. (NYSE:BBAR) has experienced falling interest from the aggregate hedge fund industry, we can see that there exists a select few hedge funds that slashed their positions entirely heading into Q4. Interestingly, Paul Marshall and Ian Wace's Marshall Wace LLP said goodbye to the biggest position of all the hedgies followed by Insider Monkey, totaling about $2.8 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund sold off about $2.7 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds heading into Q4.
Let's also examine hedge fund activity in other stocks similar to Banco BBVA Argentina S.A. (NYSE:BBAR). We will take a look at Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Universal Electronics Inc (NASDAQ:UEIC), Sleep Number Corporation (NASDAQ:SNBR), and NV5 Global, Inc. (NASDAQ:NVEE). This group of stocks' market valuations are closest to BBAR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLDD,20,78403,-5 UEIC,13,21742,1 SNBR,20,64714,0 NVEE,9,11304,0 Average,15.5,44041,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $4 million in BBAR's case. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is the most popular stock in this table. On the other hand NV5 Global, Inc. (NASDAQ:NVEE) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Banco BBVA Argentina S.A. (NYSE:BBAR) is even less popular than NVEE. Hedge funds clearly dropped the ball on BBAR as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on BBAR as the stock returned 46.2% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.