Did Hedge Funds Make The Right Call On Bloomin’ Brands Inc (BLMN) ?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Bloomin’ Brands Inc (NASDAQ:BLMN) based on that data and determine whether they were really smart about the stock.

Bloomin’ Brands Inc (NASDAQ:BLMN) investors should be aware of an increase in hedge fund sentiment in recent months. BLMN was in 24 hedge funds’ portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with BLMN holdings at the end of the previous quarter. Our calculations also showed that BLMN 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.

In the financial world there are numerous tools investors can use to grade stocks. Some of the best tools are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can trounce the S&P 500 by a superb amount (see the details here).


Philippe Laffont of Coatue Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, on one site we found out that NBA champion Isiah Thomas is now the CEO of this cannabis company. The same site also talks about a snack manufacturer that’s growing at 30% annually. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. Now we’re going to analyze the key hedge fund action encompassing Bloomin’ Brands Inc (NASDAQ:BLMN).

What have hedge funds been doing with Bloomin’ Brands Inc (NASDAQ:BLMN)?

At Q1’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the fourth quarter of 2019. By comparison, 24 hedge funds held shares or bullish call options in BLMN a year ago. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Is BLMN A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Barry Rosenstein’s JANA Partners has the most valuable position in Bloomin’ Brands Inc (NASDAQ:BLMN), worth close to $57 million, corresponding to 7.3% of its total 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $12.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism comprise Michael Zimmerman’s Prentice Capital Management, and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position JANA Partners allocated the biggest weight to Bloomin’ Brands Inc (NASDAQ:BLMN), around 7.27% of its 13F portfolio. Prentice Capital Management is also relatively very bullish on the stock, setting aside 2.01 percent of its 13F equity portfolio to BLMN.

As one would reasonably expect, key hedge funds have been driving this bullishness. Prentice Capital Management, managed by Michael Zimmerman, established the largest position in Bloomin’ Brands Inc (NASDAQ:BLMN). Prentice Capital Management had $4.2 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $1.4 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Benjamin A. Smith’s Laurion Capital Management, and Marc Majzner’s Clearline Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Bloomin’ Brands Inc (NASDAQ:BLMN) but similarly valued. These stocks are Qutoutiao Inc. (NASDAQ:QTT), PDC Energy Inc (NASDAQ:PDCE), Oxford Industries, Inc. (NYSE:OXM), and Bloom Energy Corporation (NYSE:BE). This group of stocks’ market valuations are similar to BLMN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
QTT 9 5239 4
PDCE 25 114905 -7
OXM 12 27638 0
BE 10 44648 -3
Average 14 48108 -1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $88 million in BLMN’s case. PDC Energy Inc (NASDAQ:PDCE) is the most popular stock in this table. On the other hand Qutoutiao Inc. (NASDAQ:QTT) is the least popular one with only 9 bullish hedge fund positions. Bloomin’ Brands Inc (NASDAQ:BLMN) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on BLMN as the stock returned 49.3% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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