The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards BEST Inc. (NYSE:BEST).
BEST Inc. (NYSE:BEST) has experienced a decrease in activity from the world's largest hedge funds lately. BEST Inc. (NYSE:BEST) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 16. There were 10 hedge funds in our database with BEST holdings at the end of December. Our calculations also showed that BEST isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let's view the new hedge fund action encompassing BEST Inc. (NYSE:BEST).
Do Hedge Funds Think BEST Is A Good Stock To Buy Now?
At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -50% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in BEST over the last 23 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.
When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in BEST Inc. (NYSE:BEST). Citadel Investment Group has a $0.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Millennium Management, managed by Israel Englander, which holds a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions contain Ray Dalio's Bridgewater Associates, Dmitry Balyasny's Balyasny Asset Management and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors. In terms of the portfolio weights assigned to each position Schonfeld Strategic Advisors allocated the biggest weight to BEST Inc. (NYSE:BEST), around 0.0005% of its 13F portfolio. Bridgewater Associates is also relatively very bullish on the stock, earmarking 0.0005 percent of its 13F equity portfolio to BEST.
Due to the fact that BEST Inc. (NYSE:BEST) has faced a decline in interest from hedge fund managers, it's easy to see that there exists a select few hedgies who were dropping their full holdings by the end of the first quarter. Intriguingly, Joseph Samuels's Islet Management dropped the largest stake of the "upper crust" of funds followed by Insider Monkey, comprising about $3.1 million in stock. Peter Rathjens, Bruce Clarke and John Campbell's fund, Arrowstreet Capital, also dropped its stock, about $1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds by the end of the first quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as BEST Inc. (NYSE:BEST) but similarly valued. These stocks are Clovis Oncology Inc (NASDAQ:CLVS), Koppers Holdings Inc. (NYSE:KOP), Heritage Commerce Corp. (NASDAQ:HTBK), Interface, Inc. (NASDAQ:TILE), Re/Max Holdings Inc (NYSE:RMAX), TCG BDC, Inc. (NASDAQ:CGBD), and Global Partners LP (NYSE:GLP). This group of stocks' market caps are similar to BEST's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLVS,14,75987,-3 KOP,11,42001,-2 HTBK,9,14804,0 TILE,12,28773,-1 RMAX,8,49276,-3 CGBD,8,41165,-1 GLP,2,9338,0 Average,9.1,37335,-1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.1 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $1 million in BEST's case. Clovis Oncology Inc (NASDAQ:CLVS) is the most popular stock in this table. On the other hand Global Partners LP (NYSE:GLP) is the least popular one with only 2 bullish hedge fund positions. BEST Inc. (NYSE:BEST) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BEST is 21.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately BEST wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BEST investors were disappointed as the stock returned -31.9% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.