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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Best Buy Co., Inc. (NYSE:BBY)?
Best Buy Co., Inc. (NYSE:BBY) has experienced an increase in hedge fund interest in recent months. BBY was in 37 hedge funds' portfolios at the end of March. There were 25 hedge funds in our database with BBY positions at the end of the previous quarter. Our calculations also showed that BBY 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.
According to most traders, hedge funds are assumed to be worthless, old investment vehicles of years past. While there are over 8000 funds trading at present, Our experts choose to focus on the upper echelon of this club, approximately 850 funds. These hedge fund managers handle the majority of the smart money's total capital, and by keeping an eye on their matchless picks, Insider Monkey has found several investment strategies that have historically outstripped the market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_26388" align="aligncenter" width="399"] Lee Ainslie of Maverick Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a glance at the latest hedge fund action encompassing Best Buy Co., Inc. (NYSE:BBY).
How are hedge funds trading Best Buy Co., Inc. (NYSE:BBY)?
At the end of the first quarter, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 48% from the fourth quarter of 2019. On the other hand, there were a total of 35 hedge funds with a bullish position in BBY a year ago. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in Best Buy Co., Inc. (NYSE:BBY) was held by AQR Capital Management, which reported holding $230.5 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $116.3 million position. Other investors bullish on the company included Alyeska Investment Group, Two Sigma Advisors, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position L2 Asset Management allocated the biggest weight to Best Buy Co., Inc. (NYSE:BBY), around 1.65% of its 13F portfolio. Six Columns Capital is also relatively very bullish on the stock, dishing out 1.5 percent of its 13F equity portfolio to BBY.
Consequently, some big names were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, established the most outsized position in Best Buy Co., Inc. (NYSE:BBY). Balyasny Asset Management had $37.6 million invested in the company at the end of the quarter. Clint Carlson's Carlson Capital also initiated a $10 million position during the quarter. The other funds with brand new BBY positions are Lee Ainslie's Maverick Capital, Greg Eisner's Engineers Gate Manager, and Brad Stephens's Six Columns Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Best Buy Co., Inc. (NYSE:BBY) but similarly valued. These stocks are Essex Property Trust Inc (NYSE:ESS), Fiat Chrysler Automobiles NV (NYSE:FCAU), Equifax Inc. (NYSE:EFX), and Fox Corporation (NASDAQ:FOXA). This group of stocks' market valuations are similar to BBY's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ESS,31,368188,-2 FCAU,25,395391,2 EFX,32,1300733,0 FOXA,38,1563564,1 Average,31.5,906969,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $907 million. That figure was $634 million in BBY's case. Fox Corporation (NASDAQ:FOXA) is the most popular stock in this table. On the other hand Fiat Chrysler Automobiles NV (NYSE:FCAU) is the least popular one with only 25 bullish hedge fund positions. Best Buy Co., Inc. (NYSE:BBY) is not the most popular stock in this group but hedge fund interest is still above average. 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on BBY as the stock returned 37% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.