Hedge Funds Grow Bearish On Boston Private Financial Hldg Inc (BPFH)

The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Boston Private Financial Hldg Inc (NASDAQ:BPFH) from the perspective of those successful funds.

Boston Private Financial Hldg Inc (NASDAQ:BPFH) shareholders have witnessed a decrease in enthusiasm from smart money of late. BPFH was in 14 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with BPFH positions at the end of the previous quarter. 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 Gamco Investors Inc. (NYSE:GBL), Hyster-Yale Materials Handling Inc (NYSE:HY), and Gran Tierra Energy Inc. (NYSEAMEX:GTE) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Hedge fund activity in Boston Private Financial Hldg Inc (NASDAQ:BPFH)

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a 13% fall from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards BPFH over the last 5 quarters, which shows some recent volatility. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the number one position in Boston Private Financial Hldg Inc (NASDAQ:BPFH), worth close to $17.4 million. The second largest stake is held by Mario Gabelli of GAMCO Investors, with a $16.9 million position. Other professional money managers that hold long positions include Israel Englander’s Millennium Management, Jim Simons’ Renaissance Technologies, and Philippe Jabre’s Jabre Capital Partners. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dumped their entire stakes in the stock during the third quarter. At the top of the heap, Glenn Russell Dubin’s Highbridge Capital Management dumped the largest position of all the investors tracked by Insider Monkey, worth an estimated $0.3 million in stock, and Paul Tudor Jones’ Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0.3 million worth of shares.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Boston Private Financial Hldg Inc (NASDAQ:BPFH) but similarly valued. These stocks are Gamco Investors Inc. (NYSE:GBL), Hyster-Yale Materials Handling Inc (NYSE:HY), Gran Tierra Energy Inc. (NYSEAMEX:GTE), and Irsa Inversiones y Rprsntcins SA (ADR) (NYSE:IRS). This group of stocks’ market valuations are similar to BPFH’s market valuation.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $90 million. That figure was $77 million in BPFH’s case. Gran Tierra Energy Inc. (NYSEAMEX:GTE) is the most popular stock in this table. On the other hand Gamco Investors Inc. (NYSE:GBL) is the least popular one with only 9 bullish hedge fund positions. Boston Private Financial Hldg Inc (NASDAQ:BPFH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GTE might be a better candidate to consider taking a long position in.

Disclosure: None