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Where Do Hedge Funds Stand On Barnes Group (B)?

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Abigail Fisher
·6 min read
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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 Barnes Group Inc. (NYSE:B) in this article.

Barnes Group Inc. (NYSE:B) investors should pay attention to a decrease in enthusiasm from smart money in recent months. Barnes Group Inc. (NYSE:B) was in 13 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 19. Our calculations also showed that B 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.

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

FISHER ASSET MANAGEMENT
FISHER ASSET MANAGEMENT

Ken Fisher of Fisher Asset ManagementKen Fisher

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 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Now we're going to check out the new hedge fund action encompassing Barnes Group Inc. (NYSE:B).

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

At the end of September, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -32% from the second quarter of 2020. On the other hand, there were a total of 16 hedge funds with a bullish position in B a year ago. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the largest position in Barnes Group Inc. (NYSE:B). Arrowstreet Capital has a $13.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Fisher Asset Management, managed by Ken Fisher, which holds a $9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish consist of D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position AlphaCrest Capital Management allocated the biggest weight to Barnes Group Inc. (NYSE:B), around 0.05% of its 13F portfolio. Engineers Gate Manager is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to B.

Due to the fact that Barnes Group Inc. (NYSE:B) has faced falling interest from the entirety of the hedge funds we track, it's easy to see that there was a specific group of money managers that decided to sell off their full holdings in the third quarter. Interestingly, Noam Gottesman's GLG Partners cut the biggest investment of all the hedgies tracked by Insider Monkey, worth close to $2.5 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund said goodbye to about $1.9 million worth. These moves are interesting, as aggregate hedge fund interest fell by 6 funds in the third quarter.

Let's go over hedge fund activity in other stocks similar to Barnes Group Inc. (NYSE:B). These stocks are Enable Midstream Partners LP (NYSE:ENBL), Callaway Golf Company (NYSE:ELY), Studio City International Holdings Limited (NYSE:MSC), Four Corners Property Trust, Inc. (NYSE:FCPT), Coeur Mining, Inc. (NYSE:CDE), Jack in the Box Inc. (NASDAQ:JACK), and Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NASDAQ:OMAB). This group of stocks' market caps are closest to B's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ENBL,4,8820,-1 ELY,32,390873,8 MSC,3,277757,0 FCPT,13,67476,-6 CDE,15,44740,1 JACK,38,314788,7 OMAB,7,28689,3 Average,16,161878,1.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $162 million. That figure was $37 million in B's case. Jack in the Box Inc. (NASDAQ:JACK) is the most popular stock in this table. On the other hand Studio City International Holdings Limited (NYSE:MSC) is the least popular one with only 3 bullish hedge fund positions. Barnes Group Inc. (NYSE:B) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for B is 33.8. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on B as the stock returned 39.9% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

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

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