BlackRock Credit All Inc Trust IV (BTZ): How The Best Investors Are Trading This Stock

The third quarter stock market correction has turned out to resemble the situation observed during the Asian financial crisis of 1997. The two relatively short-lived corrections occurred at a time with stable interest rates, falling commodity markets, strong-performing technology and healthcare sectors, and struggling energy sectors. Similarly, the two corrections followed long periods without a correction, which had to come sooner or later, and did. Even so, several prominent hedge fund investors publicly asserted their bearish view on the current state of the U.S equity markets, suggesting that they significantly cut their exposure to equities during the latest quarter. Having said that, it will be worthwhile to take a look at the hedge fund sentiment on BlackRock Credit All Inc Trust IV (NYSE:BTZ) in order to identify whether reputable and successful top money managers believe in its potential.

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Is BlackRock Credit All Inc Trust IV (NYSE:BTZ) the right investment to pursue these days? The best stock pickers are in a bearish mood. The number of bullish hedge fund positions stayed the same at eight, which is a slightly negative development in our experience.

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If you’d ask most investors, hedge funds are perceived as unimportant, outdated financial tools of the past. While there are over 8,000 funds trading today, experts at hedge fund tracking site Insider Monkey choose to focus on the bigwigs of this club, about 700 funds. It is estimated that this group of investors watch over the lion’s share of the hedge fund industry’s total asset base, and by tailing their unrivaled stock picks, Insider Monkey has uncovered several investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in its back tests.

Now, we’re going to view the fresh action surrounding BlackRock Credit All Inc Trust IV (NYSE:BTZ).

How have hedgies been trading BlackRock Credit All Inc Trust IV (NYSE:BTZ)?

At the end of the third quarter, a total of eight of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully.

According to hedge fund experts at Insider Monkey, Boaz Weinstein’s Saba Capital had the most valuable position in BlackRock Credit All Inc Trust IV (NYSE:BTZ), worth close to $11 million, accounting for 0.9% of its total 13F portfolio. The second-most bullish hedge fund manager was held by Clint Carlson of Carlson Capital, with a $6.4 million position; 0.1% of its 13F portfolio was allocated to the stock. Other peers with similar optimism contained Martin Whitman’s Third Avenue Management, Jonathan Barrett and Paul Segal’s Luminus Management, and Murray Stahl’s Horizon Asset Management.

Let’s also review hedge fund activity in other stocks similar to BlackRock Credit All Inc Trust IV (NYSE:BTZ). These stocks are Noah Holdings Limited (ADR) (NYSE:NOAH), PMC-Sierra Inc (NASDAQ:PMCS), Apogee Enterprises, Inc. (NASDAQ:APOG), and Natus Medical Inc (NASDAQ:BABY). This group of stocks’ market valuations are similar to BTZ’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NOAH 7 28062 -3
PMCS 34 540004 7
APOG 20 66327 1
BABY 19 135860 -1

As you can see, these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $193 million, well ahead of BTZ, in which just $26 million of smart money was invested. With elite investors underweight the stock, holding just 2.00% of its common shares and sentiment going nowhere, it appears that the best investors in the world aren’t very interested in this stock at the present juncture.