Benefytt Technologies, Inc. (BFYT): Are Hedge Funds Right About This Stock?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Benefytt Technologies, Inc. (NASDAQ:BFYT).

Is Benefytt Technologies, Inc. (NASDAQ:BFYT) going to take off soon? Investors who are in the know are in a bearish mood. The number of bullish hedge fund positions went down by 2 in recent months. Our calculations also showed that BFYT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are plenty of gauges investors can use to grade publicly traded companies. Some of the less utilized gauges are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best fund managers can trounce the S&P 500 by a solid margin (see the details here).

Carlo Cannell

J. Carlo Cannell of Cannell Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the fresh hedge fund action surrounding Benefytt Technologies, Inc. (NASDAQ:BFYT).

What does smart money think about Benefytt Technologies, Inc. (NASDAQ:BFYT)?

Heading into the second quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards BFYT over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the most valuable position in Benefytt Technologies, Inc. (NASDAQ:BFYT). OrbiMed Advisors has a $21.6 million position in the stock, comprising 0.4% of its 13F portfolio. On OrbiMed Advisors’s heels is J. Carlo Cannell of Cannell Capital, with a $21 million position; the fund has 8.7% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism contain Jeff Osher’s No Street Capital, Travis Cocke’s Voss Capital and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Voss Capital allocated the biggest weight to Benefytt Technologies, Inc. (NASDAQ:BFYT), around 18.78% of its 13F portfolio. Capital Returns Management is also relatively very bullish on the stock, dishing out 16.2 percent of its 13F equity portfolio to BFYT.

Because Benefytt Technologies, Inc. (NASDAQ:BFYT) has faced bearish sentiment from the smart money, logic holds that there was a specific group of money managers that elected to cut their full holdings heading into Q4. Interestingly, Claus Moller’s P2 Capital Partners sold off the biggest stake of the 750 funds tracked by Insider Monkey, valued at about $16 million in stock. Steve Cohen’s fund, Point72 Asset Management, also dumped its stock, about $7.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Benefytt Technologies, Inc. (NASDAQ:BFYT). These stocks are Repro Med Systems, Inc. (NASDAQ:KRMD), Shoe Carnival, Inc. (NASDAQ:SCVL), Tribune Publishing Company (NASDAQ:TPCO), and Blue Bird Corporation (NASDAQ:BLBD). All of these stocks’ market caps are closest to BFYT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
KRMD 10 9334 2
SCVL 11 31637 -5
TPCO 13 102133 0
BLBD 9 21205 -3
Average 10.75 41077 -1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $115 million in BFYT’s case. Tribune Publishing Company (NASDAQ:TPCO) is the most popular stock in this table. On the other hand Blue Bird Corporation (NASDAQ:BLBD) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Benefytt Technologies, Inc. (NASDAQ:BFYT) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. Unfortunately BFYT wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on BFYT were disappointed as the stock returned -11.6% during the second quarter (through June 25th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

Follow Benefytt Technologies Inc. (NASDAQ:BFYT)

Disclosure: None. This article was originally published at Insider Monkey.