Hedge Funds Are Dumping Boulevard Acquisition Corp II (BLVU); Should You?

Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Is Boulevard Acquisition Corp II (NASDAQ:BLVDU) a buy right now? Prominent investors are getting less optimistic. The number of bullish hedge fund positions shrunk by 4 lately.

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At the moment there are plenty of tools shareholders use toappraise their stock investments. Some of the most under-the-radar tools are hedge fund and insider trading signals. Experts at Insider Monkey, a website specializing in hedge funds, have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a healthy amount (see the details here).

Now, we’re going to take a glance at the key action surrounding Boulevard Acquisition Corp II (NASDAQ:BLVDU).

What does the smart money think about Boulevard Acquisition Corp II (NASDAQ:BLVU)?

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long in this stock, a change of -18% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially.

Of the funds tracked by Insider Monkey, Arrowgrass Capital Partners, managed by Nick Niell, holds the biggest position in Boulevard Acquisition Corp II (NASDAQ:BLVU). Arrowgrass Capital Partners has a $20.2 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish hedge fund manager is Alyeska Investment Group, led by Anand Parekh, holding a $18.8 million position; the fund has 0.2% of its 13F portfolio invested in the stock. The remaining members of the smart money with similar optimism encompass Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Jeffrey Tannenbaum’s Fir Tree and Brian Taylor’s Pine River Capital Management.

Since Boulevard Acquisition Corp II (NASDAQ:BLVU) has faced a declination in interest from the smart money, we can see that there was a specific group of hedge funds that decided to sell off their full holdings last quarter. At the top of the heap, Matthew Halbower’s Pentwater Capital Management dropped the biggest investment of all the hedgies watched by Insider Monkey, worth about $21.2 million in stock. David M. Markowitz’s fund, Oskie Capital Management, also dumped its stock, about $18.3 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to Boulevard Acquisition Corp II (NASDAQ:BLVU). These stocks are Nobilis Health Corp (NYSEMKT:HLTH), Blackrock Corporate High Yield Fund Inc (NYSE:HYT), REX American Resources Corp (NYSE:REX), and LSB Industries, Inc. (NYSE:LXU). This group of stocks’ market caps match BLVDU’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HLTH 6 5638 1
HYT 7 90026 2
REX 10 29790 -2
LXU 19 79273 7

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. LSB Industries, Inc. (NYSE:LXU) is the most popular stock in this table, while Nobilis Health Corp (NYSEMKT:HLTH) is the least popular one with only 6 funds invested. Boulevard Acquisition Corp II (NASDAQ:BLVU) is not the most popular stock in this group, but hedge fund interest is still above average. However, the stock also registered a decline in interest above its aforementioned peers, which might be a signal that the stock may be lagging.