Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 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 gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Booz Allen Hamilton Holding Corporation (NYSE:BAH) in this article.
Is Booz Allen Hamilton Holding Corporation (NYSE:BAH) an outstanding investment today? The best stock pickers are in a pessimistic mood. The number of long hedge fund positions fell by 8 lately. BAH was in 15 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with BAH holdings at the end of the previous quarter. At the end of this article we will also compare BAH to other stocks, including Senior Housing Properties Trust (NYSE:SNH), Oceaneering International (NYSE:OII), and Vedanta Ltd (ADR) (NYSE:VEDL) to get a better sense of its popularity.
Follow Booz Allen Hamilton Holding Corp (NYSE:BAH)
Follow Booz Allen Hamilton Holding Corp (NYSE:BAH)
In the financial world, there are a multitude of tools shareholders have at their disposal to appraise publicly traded companies. Some of the most under-the-radar tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can trounce the market by a significant margin (see the details here).
Keeping this in mind, we’re going to go over the recent action encompassing Booz Allen Hamilton Holding Corporation (NYSE:BAH).
How are hedge funds trading Booz Allen Hamilton Holding Corporation (NYSE:BAH)?
At the Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -35% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, holds the largest position in Booz Allen Hamilton Holding Corporation (NYSE:BAH). Polar Capital has a $50.8 million position in the stock, comprising 1% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $31.4 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that hold long positions encompass Cliff Asness’ AQR Capital Management, Ken Griffin’s Citadel Investment Group and Mark Coe’s Coe Capital Management.
Due to the fact that Booz Allen Hamilton Holding Corporation (NYSE:BAH) has faced declining sentiment from hedge fund managers, it’s safe to say that there is a sect of money managers who were dropping their full holdings by the end of the third quarter. It’s worth mentioning that Joel Greenblatt’s Gotham Asset Management dumped the largest position of the “upper crust” of funds followed by Insider Monkey, totaling close to $20.8 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also dumped its stock, about $10.7 million worth. These moves are interesting, as total hedge fund interest was cut by 8 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to Booz Allen Hamilton Holding Corporation (NYSE:BAH). These stocks are Senior Housing Properties Trust (NYSE:SNH), Oceaneering International (NYSE:OII), Vedanta Ltd (ADR) (NYSE:VEDL), and Erie Indemnity Company (NASDAQ:ERIE). This group of stocks’ market valuations match BAH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNH | 14 | 53242 | -3 |
| OII | 28 | 183011 | 1 |
| VEDL | 8 | 9625 | 5 |
| ERIE | 10 | 52490 | 2 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $152 million in BAH’s case. Oceaneering International (NYSE:OII) is the most popular stock in this table. On the other hand Vedanta Ltd (ADR) (NYSE:VEDL) is the least popular one with only 8 bullish hedge fund positions. Booz Allen Hamilton Holding Corporation (NYSE:BAH) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OII might be a better candidate to consider a long position.
