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Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Bristow Group, Inc. (NYSE:VTOL) in this article.
Is VTOL a good stock to buy now? Money managers were taking a bearish view. The number of long hedge fund positions decreased by 4 lately. Bristow Group, Inc. (NYSE:VTOL) was in 8 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 12. Our calculations also showed that VTOL isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Phillip Gross of Adage Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 website. With all of this in mind we're going to take a peek at the latest hedge fund action encompassing Bristow Group, Inc. (NYSE:VTOL).
How are hedge funds trading Bristow Group, Inc. (NYSE:VTOL)?
At Q3's end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in VTOL a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Bristow Group, Inc. (NYSE:VTOL) was held by Solus Alternative Asset Management, which reported holding $114.5 million worth of stock at the end of September. It was followed by Empyrean Capital Partners with a $45.1 million position. Other investors bullish on the company included Newtyn Management, Royce & Associates, and Adage Capital Management. In terms of the portfolio weights assigned to each position Solus Alternative Asset Management allocated the biggest weight to Bristow Group, Inc. (NYSE:VTOL), around 64.2% of its 13F portfolio. Newtyn Management is also relatively very bullish on the stock, earmarking 2.78 percent of its 13F equity portfolio to VTOL.
Because Bristow Group, Inc. (NYSE:VTOL) has experienced a decline in interest from hedge fund managers, we can see that there is a sect of hedge funds who sold off their entire stakes in the third quarter. Interestingly, Highbridge Capital Management said goodbye to the largest stake of the 750 funds monitored by Insider Monkey, totaling an estimated $3 million in stock, and David Harding's Winton Capital Management was right behind this move, as the fund dumped about $0.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 4 funds in the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Bristow Group, Inc. (NYSE:VTOL) but similarly valued. We will take a look at Arch Resources, Inc. (NYSE:ARCH), Magic Software Enterprises Ltd. (NASDAQ:MGIC), Winmark Corporation (NASDAQ:WINA), HealthStream, Inc. (NASDAQ:HSTM), Petmed Express Inc (NASDAQ:PETS), Sinovac Biotech Ltd. (NASDAQ:SVA), and Inogen Inc (NASDAQ:INGN). All of these stocks' market caps match VTOL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARCH,26,211647,8 MGIC,4,9602,1 WINA,10,81784,-3 HSTM,14,57652,-3 PETS,19,112855,0 SVA,3,67010,0 INGN,19,37302,0 Average,13.6,82550,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $191 million in VTOL's case. Arch Resources, Inc. (NYSE:ARCH) is the most popular stock in this table. On the other hand Sinovac Biotech Ltd. (NASDAQ:SVA) is the least popular one with only 3 bullish hedge fund positions. Bristow Group, Inc. (NYSE:VTOL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VTOL is 31.9. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on VTOL as the stock returned 12.6% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.