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Were Hedge Funds Right About Hibbett, Inc. (HIBB)?

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After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Hibbett, Inc. (NASDAQ:HIBB).

Is Hibbett, Inc. (NASDAQ:HIBB) a cheap investment right now? The best stock pickers were turning less bullish. The number of bullish hedge fund positions shrunk by 3 lately. Hibbett, Inc. (NASDAQ:HIBB) was in 17 hedge funds' portfolios at the end of March. The all time high for this statistic is 21. Our calculations also showed that HIBB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

At the moment there are numerous metrics shareholders use to size up publicly traded companies. A duo of the less utilized metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can trounce the broader indices by a healthy amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

John Overdeck of Two Sigma
John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. Keeping this in mind let's take a peek at the key hedge fund action encompassing Hibbett, Inc. (NASDAQ:HIBB).

Do Hedge Funds Think HIBB Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in HIBB a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Hibbett, Inc. (NASDAQ:HIBB) was held by Renaissance Technologies, which reported holding $25 million worth of stock at the end of December. It was followed by D E Shaw with a $24.3 million position. Other investors bullish on the company included Arrowstreet Capital, Intrinsic Edge Capital, and GLG Partners. In terms of the portfolio weights assigned to each position Intrinsic Edge Capital allocated the biggest weight to Hibbett, Inc. (NASDAQ:HIBB), around 1.28% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, dishing out 0.1 percent of its 13F equity portfolio to HIBB.

Judging by the fact that Hibbett, Inc. (NASDAQ:HIBB) has witnessed a decline in interest from the smart money, we can see that there exists a select few funds that decided to sell off their entire stakes in the first quarter. At the top of the heap, Ken Heebner's Capital Growth Management dumped the largest position of all the hedgies tracked by Insider Monkey, comprising about $12 million in stock. Alexander Mitchell's fund, Scopus Asset Management, also dropped its stock, about $10.4 million worth. These transactions are interesting, as total hedge fund interest was cut by 3 funds in the first quarter.

Let's check out hedge fund activity in other stocks similar to Hibbett, Inc. (NASDAQ:HIBB). These stocks are SMART Global Holdings, Inc. (NASDAQ:SGH), Berkshire Hills Bancorp, Inc. (NYSE:BHLB), Diversified Healthcare Trust (NASDAQ:DHC), Oceaneering International, Inc. (NYSE:OII), RadNet Inc. (NASDAQ:RDNT), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), and TransMedics Group, Inc. (NASDAQ:TMDX). This group of stocks' market valuations are similar to HIBB's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SGH,16,399044,-2 BHLB,11,35517,-6 DHC,10,50977,-4 OII,20,81960,0 RDNT,14,76988,2 TRHC,7,10073,3 TMDX,3,14241,-1 Average,11.6,95543,-1.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.6 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $120 million in HIBB's case. Oceaneering International, Inc. (NYSE:OII) is the most popular stock in this table. On the other hand TransMedics Group, Inc. (NASDAQ:TMDX) is the least popular one with only 3 bullish hedge fund positions. Hibbett, Inc. (NASDAQ:HIBB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HIBB is 67.5. 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 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 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Hedge funds were also right about betting on HIBB as the stock returned 33.2% since the end of Q1 (through 7/23) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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