How Big Lots, Inc. (BIG) Stacks Up To Its Peers

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Big Lots, Inc. (NYSE:BIG) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 26 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare BIG to other stocks including Cathay General Bancorp (NASDAQ:CATY), Media General, Inc. (NYSE:MEG), and J&J Snack Foods Corp. (NASDAQ:JJSF) to get a better sense of its popularity.

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What does the smart money think about Big Lots, Inc. (NYSE:BIG)?

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the previous quarter, after a nice boost in ownership of the stock during Q2. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in Big Lots, Inc. (NYSE:BIG). According to regulatory filings, the fund has a $65.8 million position in the stock. Sitting at the No. 2 spot is Steve Cohen of Point72 Asset Management, with a $20 million position. Some other professional money managers that are bullish comprise Joel Greenblatt’s Gotham Asset Management, Dmitry Balyasny’s Balyasny Asset Management, and Jim Simons’ Renaissance Technologies.

Seeing as Big Lots, Inc. (NYSE:BIG) has faced no change in interest from hedge fund managers, we must take a look at a select few hedge funds that elected to cut their full holdings in the third quarter. At the top of the heap, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital dropped the biggest position of the 700 funds watched by Insider Monkey, totaling about $7.5 million in stock, and David E. Shaw’s D E Shaw was right behind this move, as the fund dropped about $4 million worth of BIG shares. These transactions 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 similar to Big Lots, Inc. (NYSE:BIG). We will take a look at Cathay General Bancorp (NASDAQ:CATY), Media General, Inc. (NYSE:MEG), J&J Snack Foods Corp. (NASDAQ:JJSF), and Dril-Quip, Inc. (NYSE:DRQ). This group of stocks’ market valuations are closest to BIG’s market valuation.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $248 million. That figure was $162 million in BIG’s case. Media General, Inc. (NYSE:MEG) is the most popular stock in this table. On the other hand J&J Snack Foods Corp. (NASDAQ:JJSF) is the least popular one with only 10 bullish hedge fund positions. Big Lots, Inc. (NYSE:BIG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MEG might be a better candidate to consider a long position in.

Disclosure: None