Hedge Funds Are Nibbling On Brookdale Senior Living, Inc. (BKD)

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Brookdale Senior Living, Inc. (NYSE:BKD).

Is Brookdale Senior Living, Inc. (NYSE:BKD) a great investment now? The smart money was in an optimistic mood. The number of long hedge fund positions inched up by 4 recently. Brookdale Senior Living, Inc. (NYSE:BKD) was in 23 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 66. Our calculations also showed that BKD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Frank Brosens Taconic Capital

Frank Brosens of Taconic Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to review the latest hedge fund action encompassing Brookdale Senior Living, Inc. (NYSE:BKD).

Do Hedge Funds Think BKD Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BKD over the last 23 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.

More specifically, Glenview Capital was the largest shareholder of Brookdale Senior Living, Inc. (NYSE:BKD), with a stake worth $109.2 million reported as of the end of March. Trailing Glenview Capital was Camber Capital Management, which amassed a stake valued at $75.6 million. Renaissance Technologies, Deerfield Management, and D E Shaw 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 59 North Capital allocated the biggest weight to Brookdale Senior Living, Inc. (NYSE:BKD), around 5.56% of its 13F portfolio. North Run Capital is also relatively very bullish on the stock, earmarking 3.43 percent of its 13F equity portfolio to BKD.

As aggregate interest increased, key money managers were breaking ground themselves. 59 North Capital, managed by Michael Bilger, assembled the most valuable position in Brookdale Senior Living, Inc. (NYSE:BKD). 59 North Capital had $13.3 million invested in the company at the end of the quarter. Frank Brosens’s Taconic Capital also initiated a $1.2 million position during the quarter. The following funds were also among the new BKD investors: Paul Tudor Jones’s Tudor Investment Corp, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Donald Sussman’s Paloma Partners.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Brookdale Senior Living, Inc. (NYSE:BKD) but similarly valued. These stocks are Avid Bioservices, Inc. (NASDAQ:CDMO), NOW Inc (NYSE:DNOW), Community Healthcare Trust Inc (NYSE:CHCT), Brooge Energy Limited (NASDAQ:BROG), Colony Credit Real Estate, Inc. (NYSE:CLNC), Diebold Nixdorf Incorporated (NYSE:DBD), and Prothena Corporation plc (NASDAQ:PRTA). All of these stocks’ market caps resemble BKD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CDMO 21 140924 -4
DNOW 18 117523 -4
CHCT 14 81537 2
BROG 6 40875 0
CLNC 8 58730 -2
DBD 19 183518 1
PRTA 17 450354 -3
Average 14.7 153352 -1.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $153 million. That figure was $386 million in BKD’s case. Avid Bioservices, Inc. (NASDAQ:CDMO) is the most popular stock in this table. On the other hand Brooge Energy Limited (NASDAQ:BROG) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Brookdale Senior Living, Inc. (NYSE:BKD) is more popular among hedge funds. Our overall hedge fund sentiment score for BKD is 69.5. 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. 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 returned 23.8% in 2021 through July 16th but still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on BKD as the stock returned 34.9% since the end of March (through 7/16) 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.

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