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Hedge Funds Are Dumping Hasbro, Inc. (HAS)

In this article you are going to find out whether hedge funds think Hasbro, Inc. (NASDAQ:HAS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Hasbro, Inc. (NASDAQ:HAS) investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. HAS was in 25 hedge funds’ portfolios at the end of the first quarter of 2020. There were 36 hedge funds in our database with HAS positions at the end of the previous quarter. Our calculations also showed that HAS 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

MOORE GLOBAL INVESTMENTS

Louis Bacon Moore of Moore Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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. Keeping this in mind let’s view the fresh hedge fund action regarding Hasbro, Inc. (NASDAQ:HAS).

How have hedgies been trading Hasbro, Inc. (NASDAQ:HAS)?

At Q1’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the fourth quarter of 2019. By comparison, 18 hedge funds held shares or bullish call options in HAS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Hasbro, Inc. (NASDAQ:HAS). Citadel Investment Group has a $106.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is Cliff Asness of AQR Capital Management, with a $71.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism encompass Anand Parekh’s Alyeska Investment Group, Dmitry Balyasny’s Balyasny Asset Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Sabrepoint Capital allocated the biggest weight to Hasbro, Inc. (NASDAQ:HAS), around 3.48% of its 13F portfolio. Sirios Capital Management is also relatively very bullish on the stock, setting aside 1.09 percent of its 13F equity portfolio to HAS.

Judging by the fact that Hasbro, Inc. (NASDAQ:HAS) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedge funds that elected to cut their full holdings in the first quarter. It’s worth mentioning that Tom Gayner’s Markel Gayner Asset Management said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, comprising about $38.4 million in stock. Benjamin A. Smith’s fund, Laurion Capital Management, also sold off its stock, about $22.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 11 funds in the first quarter.

Let’s also examine hedge fund activity in other stocks similar to Hasbro, Inc. (NASDAQ:HAS). We will take a look at J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Live Nation Entertainment, Inc. (NYSE:LYV), Korea Electric Power Corporation (NYSE:KEP), and Magna International Inc. (NYSE:MGA). This group of stocks’ market values are similar to HAS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
JBHT 25 225951 -3
LYV 46 1626857 2
KEP 7 30022 4
MGA 22 412543 -1
Average 25 573843 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $574 million. That figure was $452 million in HAS’s case. Live Nation Entertainment, Inc. (NYSE:LYV) is the most popular stock in this table. On the other hand Korea Electric Power Corporation (NYSE:KEP) is the least popular one with only 7 bullish hedge fund positions. Hasbro, Inc. (NASDAQ:HAS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 13.9% in 2020 through June 10th and surpassed the market by 14.2 percentage points. Unfortunately HAS wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); HAS investors were disappointed as the stock returned 7.4% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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