Before we spend countless hours researching a company, we'd like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Bemis Company, Inc. (NYSE:BMS).
Hedge fund interest in Bemis Company, Inc. (NYSE:BMS) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare BMS to other stocks including LogMeIn Inc (NASDAQ:LOGM), MAXIMUS, Inc. (NYSE:MMS), and AECOM (NYSE:ACM) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? 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 32 percentage points since May 2014 through March 12, 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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's go over the recent hedge fund action encompassing Bemis Company, Inc. (NYSE:BMS).
How are hedge funds trading Bemis Company, Inc. (NYSE:BMS)?
At Q4's end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BMS over the last 14 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.
Of the funds tracked by Insider Monkey, Magnetar Capital, managed by Alec Litowitz and Ross Laser, holds the largest position in Bemis Company, Inc. (NYSE:BMS). Magnetar Capital has a $46.6 million position in the stock, comprising 1.1% of its 13F portfolio. The second most bullish fund manager is Starboard Value LP, led by Jeffrey Smith, holding a $25.9 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Greg Poole's Echo Street Capital Management, Carl Tiedemann and Michael Tiedemann's TIG Advisors and Paul Marshall and Ian Wace's Marshall Wace LLP.
Due to the fact that Bemis Company, Inc. (NYSE:BMS) has faced declining sentiment from hedge fund managers, logic holds that there exists a select few hedgies that decided to sell off their full holdings heading into Q3. Interestingly, James Dinan's York Capital Management dropped the biggest position of all the hedgies watched by Insider Monkey, comprising an estimated $13.6 million in stock. John Orrico's fund, Water Island Capital, also dropped its stock, about $12 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Bemis Company, Inc. (NYSE:BMS) but similarly valued. These stocks are LogMeIn Inc (NASDAQ:LOGM), MAXIMUS, Inc. (NYSE:MMS), AECOM (NYSE:ACM), and Seaboard Corporation (NYSE:SEB). All of these stocks' market caps are similar to BMS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LOGM,28,560052,-1 MMS,22,302543,2 ACM,18,321816,0 SEB,10,64098,1 Average,19.5,312127,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $312 million. That figure was $305 million in BMS's case. LogMeIn Inc (NASDAQ:LOGM) is the most popular stock in this table. On the other hand Seaboard Corporation (NYSE:SEB) is the least popular one with only 10 bullish hedge fund positions. Bemis Company, Inc. (NYSE:BMS) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on BMS, though not to the same extent, as the stock returned 20.8% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.