The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) based on those filings.
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) has experienced an increase in hedge fund interest lately. Our calculations also showed that FLWS 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a glance at the recent hedge fund action encompassing 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS).
What have hedge funds been doing with 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS)?
At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards FLWS over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Shannon River Fund Management, managed by Spencer M. Waxman, holds the number one position in 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS). Shannon River Fund Management has a $12.2 million position in the stock, comprising 2.1% of its 13F portfolio. Coming in second is Marshall Wace LLP, led by Paul Marshall and Ian Wace, holding a $8.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism encompass Mario Gabelli’s GAMCO Investors, Mark Coe’s Intrinsic Edge Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Beddow Capital Management allocated the biggest weight to 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), around 3.13% of its 13F portfolio. Nishkama Capital is also relatively very bullish on the stock, earmarking 2.13 percent of its 13F equity portfolio to FLWS.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most outsized position in 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS). Marshall Wace LLP had $8.5 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also initiated a $1.6 million position during the quarter. The other funds with brand new FLWS positions are Ravee Mehta’s Nishkama Capital, Joel Greenblatt’s Gotham Asset Management, and Israel Englander’s Millennium Management.
Let’s now review hedge fund activity in other stocks similar to 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS). We will take a look at Sunnova Energy International Inc. (NYSE:NOVA), Hercules Capital Inc (NYSE:HTGC), The RMR Group Inc. (NASDAQ:RMR), and Revance Therapeutics Inc (NASDAQ:RVNC). This group of stocks’ market valuations match FLWS’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $60 million in FLWS’s case. Hercules Capital Inc (NYSE:HTGC) is the most popular stock in this table. On the other hand Sunnova Energy International Inc. (NYSE:NOVA) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) 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 returned 13.4% in 2020 through June 22nd but still managed to beat the market by 15.9 percentage points. Hedge funds were also right about betting on FLWS as the stock returned 76.4% so far in Q2 (through June 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.