Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles 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 over the last 4.5 years and analyze what the smart money thinks of John Bean Technologies Corporation (NYSE:JBT) based on that data and determine whether they were really smart about the stock.
Is John Bean Technologies Corporation (NYSE:JBT) going to take off soon? Money managers were selling. The number of bullish hedge fund positions fell by 4 lately. Our calculations also showed that JBT 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Phill Gross of Adage Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a gander at the key hedge fund action regarding John Bean Technologies Corporation (NYSE:JBT).
Hedge fund activity in John Bean Technologies Corporation (NYSE:JBT)
At Q1’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in JBT a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of John Bean Technologies Corporation (NYSE:JBT), with a stake worth $56.5 million reported as of the end of September. Trailing Royce & Associates was Adage Capital Management, which amassed a stake valued at $6 million. Citadel Investment Group, D E Shaw, and Motley Fool Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to John Bean Technologies Corporation (NYSE:JBT), around 0.77% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.34 percent of its 13F equity portfolio to JBT.
Judging by the fact that John Bean Technologies Corporation (NYSE:JBT) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of fund managers that elected to cut their positions entirely in the first quarter. Intriguingly, Peter Muller’s PDT Partners dumped the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at close to $3 million in stock, and Javier Velazquez’s Albar Capital was right behind this move, as the fund said goodbye to about $2.2 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 4 funds in the first quarter.
Let’s go over hedge fund activity in other stocks similar to John Bean Technologies Corporation (NYSE:JBT). We will take a look at Youdao, Inc. (NYSE:DAO), Norwegian Cruise Line Holdings Ltd (NYSE:NCLH), Ternium S.A. (NYSE:TX), and Colfax Corporation (NYSE:CFX). This group of stocks’ market values match JBT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DAO | 6 | 183674 | 3 |
| NCLH | 20 | 113661 | -18 |
| TX | 8 | 62086 | -3 |
| CFX | 32 | 421377 | -11 |
| Average | 16.5 | 195200 | -7.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $195 million. That figure was $70 million in JBT’s case. Colfax Corporation (NYSE:CFX) is the most popular stock in this table. On the other hand Youdao, Inc. (NYSE:DAO) is the least popular one with only 6 bullish hedge fund positions. John Bean Technologies Corporation (NYSE:JBT) 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 12.3% in 2020 through June 30th and surpassed the market by 15.5 percentage points. Unfortunately JBT wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); JBT investors were disappointed as the stock returned 16% 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.
