Did The Smart Money Get Hanesbrands Inc. (HBI) Right?

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 867 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 September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Hanesbrands Inc. (NYSE:HBI) and determine whether the smart money was really smart about this stock.

Is Hanesbrands Inc. (NYSE:HBI) a bargain? The smart money was taking an optimistic view. The number of long hedge fund bets increased by 1 lately. Hanesbrands Inc. (NYSE:HBI) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that HBI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a look at the fresh hedge fund action encompassing Hanesbrands Inc. (NYSE:HBI).

Do Hedge Funds Think HBI Is A Good Stock To Buy Now?

At the end of September, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. On the other hand, there were a total of 36 hedge funds with a bullish position in HBI a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is HBI A Good Stock To Buy?

The largest stake in Hanesbrands Inc. (NYSE:HBI) was held by Lyrical Asset Management, which reported holding $213.6 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $48.6 million position. Other investors bullish on the company included Two Sigma Advisors, Candlestick Capital Management, and Prentice Capital Management. In terms of the portfolio weights assigned to each position Prentice Capital Management allocated the biggest weight to Hanesbrands Inc. (NYSE:HBI), around 5.12% of its 13F portfolio. Lyrical Asset Management is also relatively very bullish on the stock, dishing out 2.74 percent of its 13F equity portfolio to HBI.

Now, some big names were leading the bulls’ herd. Candlestick Capital Management, managed by Jack Woodruff, established the largest position in Hanesbrands Inc. (NYSE:HBI). Candlestick Capital Management had $29.2 million invested in the company at the end of the quarter. Renaissance Technologies also made a $12.5 million investment in the stock during the quarter. The other funds with brand new HBI positions are Anand Parekh’s Alyeska Investment Group, Qing Li’s Sciencast Management, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now review hedge fund activity in other stocks similar to Hanesbrands Inc. (NYSE:HBI). We will take a look at ASGN Incorporated (NYSE:ASGN), New York Community Bancorp, Inc. (NYSE:NYCB), FIGS Inc. (NYSE:FIGS), Leggett & Platt, Inc. (NYSE:LEG), Power Integrations Inc (NASDAQ:POWI), Ingredion Incorporated (NYSE:INGR), and Red Rock Resorts, Inc. (NASDAQ:RRR). This group of stocks’ market caps are closest to HBI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASGN 11 43470 -4
NYCB 27 482594 -3
FIGS 21 821787 21
LEG 16 56164 2
POWI 24 192517 3
INGR 20 391796 -1
RRR 26 439302 0
Average 20.7 346804 2.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $347 million. That figure was $501 million in HBI’s case. New York Community Bancorp, Inc. (NYSE:NYCB) is the most popular stock in this table. On the other hand ASGN Incorporated (NYSE:ASGN) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Hanesbrands Inc. (NYSE:HBI) is more popular among hedge funds. Our overall hedge fund sentiment score for HBI is 80.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, HBI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HBI were disappointed as the stock returned -5.4% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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