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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 BrightSphere Investment Group Inc (NYSE:BSIG).
Hedge fund interest in BrightSphere Investment Group Inc (NYSE:BSIG) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BSIG isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare BSIG to other stocks including New Frontier Health Corporation (NYSE:NFH), Veritex Holdings Inc (NASDAQ:VBTX), and YPF Sociedad Anonima (NYSE:YPF) to get a better sense of its popularity.
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.
Martin Whitman of Third Avenue Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. 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. Now let's take a glance at the fresh hedge fund action surrounding BrightSphere Investment Group Inc (NYSE:BSIG).
Do Hedge Funds Think BSIG Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BSIG over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, John Paulson's Paulson & Co has the biggest position in BrightSphere Investment Group Inc (NYSE:BSIG), worth close to $407.6 million, comprising 9.4% of its total 13F portfolio. The second most bullish fund manager is Ryan Tolkin (CIO) of Schonfeld Strategic Advisors, with a $39.8 million position; 0.5% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism contain Ravi Chopra's Azora Capital, Dmitry Balyasny's Balyasny Asset Management and Daniel Johnson's Gillson Capital. In terms of the portfolio weights assigned to each position Paulson & Co allocated the biggest weight to BrightSphere Investment Group Inc (NYSE:BSIG), around 9.36% of its 13F portfolio. Toscafund Asset Management is also relatively very bullish on the stock, earmarking 6.58 percent of its 13F equity portfolio to BSIG.
Judging by the fact that BrightSphere Investment Group Inc (NYSE:BSIG) has experienced falling interest from the smart money, it's safe to say that there were a few fund managers that elected to cut their entire stakes heading into Q2. It's worth mentioning that Nathaniel August's Mangrove Partners dumped the biggest position of the "upper crust" of funds tracked by Insider Monkey, comprising about $7 million in stock, and Renaissance Technologies was right behind this move, as the fund cut about $1.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as BrightSphere Investment Group Inc (NYSE:BSIG) but similarly valued. We will take a look at New Frontier Health Corporation (NYSE:NFH), Veritex Holdings Inc (NASDAQ:VBTX), YPF Sociedad Anonima (NYSE:YPF), Methode Electronics Inc. (NYSE:MEI), Delek US Holdings, Inc. (NYSE:DK), Design Therapeutics, Inc. (NASDAQ:DSGN), and Plantronics, Inc. (NYSE:PLT). This group of stocks' market valuations resemble BSIG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NFH,13,310954,1 VBTX,6,38738,-1 YPF,8,9228,2 MEI,13,80123,2 DK,13,305089,-4 DSGN,15,543833,15 PLT,17,84392,1 Average,12.1,196051,2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $196 million. That figure was $642 million in BSIG's case. Plantronics, Inc. (NYSE:PLT) is the most popular stock in this table. On the other hand Veritex Holdings Inc (NASDAQ:VBTX) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks BrightSphere Investment Group Inc (NYSE:BSIG) is more popular among hedge funds. Our overall hedge fund sentiment score for BSIG is 85. 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 returned 24% in 2021 through July 9th but still managed to beat the market by 6.7 percentage points. Hedge funds were also right about betting on BSIG as the stock returned 18.6% since the end of March (through 7/9) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.