Hedge Funds Aren’t Crazy About The Bon-Ton Stores, Inc. (BONT) Anymore

It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards The Bon-Ton Stores, Inc. (NASDAQ:BONT) during the quarter below.

Is The Bon-Ton Stores, Inc. (NASDAQ:BONT) worth your attention right now? Money managers are reducing their bets on the stock. The number of bullish hedge fund positions shrunk by 1 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Gulf Resources, Inc. (NASDAQ:GURE), Aviat Networks Inc (NASDAQ:AVNW), and Carolina Bank Holding Inc. (NC) (NASDAQ:CLBH) to gather more data points.

If you’d ask most market participants, hedge funds are viewed as worthless, old financial vehicles of years past. While there are more than 8000 funds in operation at the moment, We hone in on the leaders of this group, around 700 funds. Most estimates calculate that this group of people orchestrate the majority of the smart money’s total capital, and by following their finest picks, Insider Monkey has discovered several investment strategies that have historically outstripped the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, we’re going to review the recent action regarding The Bon-Ton Stores, Inc. (NASDAQ:BONT).

What does the smart money think about The Bon-Ton Stores, Inc. (NASDAQ:BONT)?

At the Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Brigade Capital, managed by Don Morgan, holds the most valuable position in The Bon-Ton Stores, Inc. (NASDAQ:BONT). Brigade Capital has a $5.6 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is David Warren’s DW Partners, with a $5.4 million position; the fund has 3.9% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise Mario Gabelli’s GAMCO Investors, Chuck Royce’s Royce & Associates and Michael Zimmerman’s Prentice Capital Management.