Does B/E Aerospace Inc (NASDAQ:BEAV) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
B/E Aerospace Inc (NASDAQ:BEAV) investors should be aware of a decrease in hedge fund sentiment of late. BEAV was in 46 hedge funds’ portfolios at the end of September. There were 50 hedge funds in our database with BEAV holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Health Net, Inc. (NYSE:HNT), Jacobs Engineering Group Inc (NYSE:JEC), and Aluminum Corp. of China Limited (ADR) (NYSE:ACH) to gather more data points.
Follow B/E Aerospace Inc (NASDAQ:BEAV)
Follow B/E Aerospace Inc (NASDAQ:BEAV)
If you’d ask most shareholders, hedge funds are viewed as worthless, outdated financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, We hone in on the masters of this club, about 700 funds. These hedge fund managers preside over bulk of the smart money’s total capital, and by observing their highest performing picks, Insider Monkey has figured out a number of investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, we’re going to take a look at the new action surrounding B/E Aerospace Inc (NASDAQ:BEAV).
How have hedgies been trading B/E Aerospace Inc (NASDAQ:BEAV)?
At Q3’s end, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Keith Meister’s Corvex Capital has the largest position in B/E Aerospace Inc (NASDAQ:BEAV), worth close to $363 million, comprising 4.3% of its total 13F portfolio. On Corvex Capital’s heels is Thomas Steyer’s Farallon Capital holding a $207.6 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Jonathon Jacobson’s Highfields Capital Management, and Daniel S. Och’s OZ Management.
Seeing as B/E Aerospace Inc (NASDAQ:BEAV) has witnessed bearish sentiment from the smart money, logic holds that there exists a select few funds that slashed their positions entirely heading into Q4. At the top of the heap, Matthew Mark’s Jet Capital Investors dumped the largest position of all the hedgies watched by Insider Monkey, totaling an estimated $76.3 million in stock. James Dinan’s fund, York Capital Management, also cut its stock, about $72.7 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as B/E Aerospace Inc (NASDAQ:BEAV) but similarly valued. These stocks are Health Net, Inc. (NYSE:HNT), Jacobs Engineering Group Inc (NYSE:JEC), Aluminum Corp. of China Limited (ADR) (NYSE:ACH), and CubeSmart (NYSE:CUBE). This group of stocks’ market valuations are closest to BEAV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HNT | 43 | 1059112 | 6 |
| JEC | 26 | 179316 | 10 |
| ACH | 5 | 3478 | -1 |
| CUBE | 14 | 260978 | 3 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $376 million. That figure was $1.70 billion in BEAV’s case. Health Net, Inc. (NYSE:HNT) is the most popular stock in this table with 43 funds holding shares. On the other hand Aluminum Corp. of China Limited (ADR) (NYSE:ACH) is the least popular. Compared to these stocks B/E Aerospace Inc (NASDAQ:BEAV) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially go long.
