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 Barrett Business Services, Inc. (NASDAQ:BBSI) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Barrett Business Services, Inc. (NASDAQ:BBSI) has experienced a decrease in hedge fund sentiment lately. BBSI was in 11 hedge funds' portfolios at the end of the second quarter of 2019. There were 13 hedge funds in our database with BBSI holdings at the end of the previous quarter. Our calculations also showed that BBSI 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, 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 review the new hedge fund action encompassing Barrett Business Services, Inc. (NASDAQ:BBSI).
Hedge fund activity in Barrett Business Services, Inc. (NASDAQ:BBSI)
At Q2's end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in BBSI a year ago. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Barrett Business Services, Inc. (NASDAQ:BBSI), which was worth $33.2 million at the end of the second quarter. On the second spot was Cloverdale Capital Management which amassed $18.1 million worth of shares. Moreover, AQR Capital Management, GLG Partners, and Two Sigma Advisors were also bullish on Barrett Business Services, Inc. (NASDAQ:BBSI), allocating a large percentage of their portfolios to this stock.
Since Barrett Business Services, Inc. (NASDAQ:BBSI) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers that elected to cut their entire stakes last quarter. At the top of the heap, Israel Englander's Millennium Management sold off the largest position of all the hedgies watched by Insider Monkey, comprising about $0.6 million in stock, and Paul Tudor Jones's Tudor Investment Corp was right behind this move, as the fund dropped about $0.2 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let's now review hedge fund activity in other stocks similar to Barrett Business Services, Inc. (NASDAQ:BBSI). We will take a look at Renewable Energy Group Inc (NASDAQ:REGI), Century Aluminum Company (NASDAQ:CENX), Translate Bio, Inc. (NASDAQ:TBIO), and Cresud Sociedad Anonima Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) (NASDAQ:CRESY). All of these stocks' market caps resemble BBSI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position REGI,17,54715,-2 CENX,14,34743,2 TBIO,10,156077,3 CRESY,7,22661,0 Average,12,67049,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $81 million in BBSI's case. Renewable Energy Group Inc (NASDAQ:REGI) is the most popular stock in this table. On the other hand Cresud Sociedad Anonima Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY) (NASDAQ:CRESY) is the least popular one with only 7 bullish hedge fund positions. Barrett Business Services, Inc. (NASDAQ:BBSI) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on BBSI as the stock returned 7.9% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.