Hedge Funds Stunned By Best Buy Co., Inc. (BBY)’s Earnings Beat

Right And Wrong

As mentioned, the second quarter sentiment swoon continued a trend witnessed in the first quarter. As we reported in July, hedge funds’ first quarter sentiment was right as shares fell by 5.78% on July 17 courtesy a Bank of America Corp (NYSE:BAC) double-notch downgrade to ‘Underperform’ from ‘Buy’. Hedge fund ownership had declined to 41 from 50 during the first quarter, while aggregate value of holdings had fallen by over 13% to $888 million. As mentioned, shares were down heavily during the second quarter, and were down in the third quarter at that point, validating hedge funds’ bearishness. With the strong gains today however, shares are now up slightly in the third quarter.

Taking a look at the investors with positions in Best Buy Co., Inc. (NYSE:BBY), we find Cliff Asness’ AQR Capital Management firmly at the top of the list, holding 7.01 million shares as of June 30, worth over $228 million. David Harding was another bullish investor, with his fund Winton Capital Management owning 2.54 million shares. The two billionaires both increased their stakes in the company during the second quarter, by 19% and 37% respectively. Just seven funds in our database opened new positions in the stock during the quarter, the largest being Steve Cohen’s position of 601,400 shares. Of the funds that closed positions in the second quarter, the most notable closure was by Phill Gross and Robert Atchinson’s Adage Capital Management, which closed its 1.27 million-share stake worth nearly $66 million as of March 31.

Disclosure: None