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Do Hedge Funds Love BJ’s Restaurants, Inc. (BJRI)?

Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups 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 and analyze what the smart money thinks of BJ’s Restaurants, Inc. (NASDAQ:BJRI) based on that data.

BJ’s Restaurants, Inc. (NASDAQ:BJRI) has experienced an increase in enthusiasm from smart money in recent months. Our calculations also showed that BJRI isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Overdeck of Two Sigma

Let’s go over the fresh hedge fund action encompassing BJ’s Restaurants, Inc. (NASDAQ:BJRI).

How have hedgies been trading BJ’s Restaurants, Inc. (NASDAQ:BJRI)?

At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards BJRI over the last 13 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

BJRI_dec2018

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the number one position in BJ’s Restaurants, Inc. (NASDAQ:BJRI), worth close to $33.3 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Paul Marshall and Ian Wace of Marshall Wace LLP, with a $25.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Jim Simons’s Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.

As aggregate interest increased, key money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most outsized position in BJ’s Restaurants, Inc. (NASDAQ:BJRI). Marshall Wace LLP had $25.2 million invested in the company at the end of the quarter. Ian Simm’s Impax Asset Management also made a $5.2 million investment in the stock during the quarter. The following funds were also among the new BJRI investors: Mike Vranos’s Ellington, Anthony Joseph Vaccarino’s North Fourth Asset Management, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BJ’s Restaurants, Inc. (NASDAQ:BJRI) but similarly valued. We will take a look at Editas Medicine, Inc. (NASDAQ:EDIT), First Busey Corporation (NASDAQ:BUSE), Mirati Therapeutics, Inc. (NASDAQ:MRTX), and Royce Value Trust, Inc. (NYSE:RVT). This group of stocks’ market caps match BJRI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EDIT 17 148184 0
BUSE 14 52759 1
MRTX 24 661199 5
RVT 2 13939 -1
Average 14.25 219020 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $219 million. That figure was $195 million in BJRI’s case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Royce Value Trust, Inc. (NYSE:RVT) is the least popular one with only 2 bullish hedge fund positions. BJ’s Restaurants, Inc. (NASDAQ:BJRI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MRTX might be a better candidate to consider a long position.

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

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