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John Bean Technologies Corporation (JBT): Hedge Fund Sentiment Improving But Still Negative

Abigail Fisher

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The Standard and Poor’s 500 Index returned approximately 20% in the first 9 months of this year (through September 30th). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 24% during the same 9-month period, with the majority of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds' consensus stock picks generate superior risk-adjusted returns. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like John Bean Technologies Corporation (NYSE:JBT).

John Bean Technologies Corporation (NYSE:JBT) shareholders have witnessed an increase in hedge fund interest recently at the margin, but overall hedge fund sentiment towards the stock is still near its all time lows. Our calculations also showed that JBT isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

In the eyes of most stock holders, hedge funds are viewed as unimportant, outdated investment tools of the past. While there are greater than 8000 funds with their doors open today, Our researchers look at the leaders of this club, around 750 funds. These investment experts watch over bulk of the hedge fund industry's total asset base, and by tailing their best equity investments, Insider Monkey has identified a few investment strategies that have historically outstripped the broader indices. Insider Monkey's flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .

JBT_oct2019

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. We're going to go over the recent hedge fund action regarding John Bean Technologies Corporation (NYSE:JBT).

How have hedgies been trading John Bean Technologies Corporation (NYSE:JBT)?

At Q2's end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards JBT over the last 16 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

GOTHAM ASSET MANAGEMENT

More specifically, Royce & Associates was the largest shareholder of John Bean Technologies Corporation (NYSE:JBT), with a stake worth $89.7 million reported as of the end of March. Trailing Royce & Associates was Driehaus Capital, which amassed a stake valued at $6 million. Citadel Investment Group, Citadel Investment Group, and Gotham Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.

As aggregate interest increased, key money managers were leading the bulls' herd. Balyasny Asset Management, managed by Dmitry Balyasny, created the most valuable position in John Bean Technologies Corporation (NYSE:JBT). Balyasny Asset Management had $0.3 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also initiated a $0.3 million position during the quarter. The only other fund with a brand new JBT position is Roger Ibbotson's Zebra Capital Management.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as John Bean Technologies Corporation (NYSE:JBT) but similarly valued. We will take a look at EQT Corporation (NYSE:EQT), ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), Stag Industrial Inc (NYSE:STAG), and Mirati Therapeutics, Inc. (NASDAQ:MRTX). All of these stocks' market caps are similar to JBT's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EQT,35,873071,-1 ACAD,21,1345657,1 STAG,11,138143,-4 MRTX,27,1623476,-1 Average,23.5,995087,-1.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $995 million. That figure was $102 million in JBT's case. EQT Corporation (NYSE:EQT) is the most popular stock in this table. On the other hand Stag Industrial Inc (NYSE:STAG) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks John Bean Technologies Corporation (NYSE:JBT) is even less popular than STAG. Hedge funds dodged a bullet by taking a bearish stance towards JBT. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately JBT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); JBT investors were disappointed as the stock returned -17.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

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

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