The financial regulations require hedge funds and wealthy investors that exceeded the $100 million 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 September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded BGC Partners, Inc. (NASDAQ:BGCP) based on those filings.
Is BGC Partners, Inc. (NASDAQ:BGCP) a splendid investment today? The best stock pickers were taking a pessimistic view. The number of bullish hedge fund positions were trimmed by 8 in recent months. BGC Partners, Inc. (NASDAQ:BGCP) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 31. Our calculations also showed that BGCP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 31 hedge funds in our database with BGCP holdings at the end of June.
Dmitry Balyasny of Balyasny Asset Management
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 check out the fresh hedge fund action regarding BGC Partners, Inc. (NASDAQ:BGCP).
Do Hedge Funds Think BGCP Is A Good Stock To Buy Now?
At the end of September, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -26% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BGCP over the last 25 quarters. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in BGC Partners, Inc. (NASDAQ:BGCP) was held by Cardinal Capital, which reported holding $84.6 million worth of stock at the end of September. It was followed by Arctis Global with a $66.8 million position. Other investors bullish on the company included Rubric Capital Management, Alyeska Investment Group, and AltraVue Capital. In terms of the portfolio weights assigned to each position Arctis Global allocated the biggest weight to BGC Partners, Inc. (NASDAQ:BGCP), around 19.42% of its 13F portfolio. AltraVue Capital is also relatively very bullish on the stock, dishing out 3.34 percent of its 13F equity portfolio to BGCP.
Because BGC Partners, Inc. (NASDAQ:BGCP) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of funds that elected to cut their full holdings last quarter. Interestingly, Jerome L. Simon’s Lonestar Capital Management cut the largest investment of all the hedgies followed by Insider Monkey, worth about $4 million in stock. Daniel Johnson’s fund, Gillson Capital, also dropped its stock, about $3.2 million worth. These transactions are important to note, as total hedge fund interest was cut by 8 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as BGC Partners, Inc. (NASDAQ:BGCP) but similarly valued. These stocks are ESCO Technologies Inc. (NYSE:ESE), Revance Therapeutics Inc (NASDAQ:RVNC), NetScout Systems, Inc. (NASDAQ:NTCT), Park National Corporation (NYSE:PRK), DiamondRock Hospitality Company (NYSE:DRH), Two Harbors Investment Corp (NYSE:TWO), and Oasis Petroleum Inc. (NYSE:OAS). This group of stocks’ market caps match BGCP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESE | 16 | 102837 | 3 |
| RVNC | 16 | 200058 | 4 |
| NTCT | 10 | 122970 | -1 |
| PRK | 3 | 1926 | -3 |
| DRH | 19 | 137957 | 7 |
| TWO | 31 | 155649 | 1 |
| OAS | 19 | 224452 | -4 |
| Average | 16.3 | 135121 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $371 million in BGCP’s case. Two Harbors Investment Corp (NYSE:TWO) is the most popular stock in this table. On the other hand Park National Corporation (NYSE:PRK) is the least popular one with only 3 bullish hedge fund positions. BGC Partners, Inc. (NASDAQ:BGCP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BGCP is 55. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately BGCP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BGCP were disappointed as the stock returned -10.2% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
