You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros and Seth Klarman hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Hedge fund interest in Barrett Business Services, Inc. (NASDAQ:BBSI) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare BBSI to other stocks including Allied Motion Technologies, Inc. (NASDAQ:AMOT), CIRCOR International, Inc. (NYSE:CIR), and EZCORP Inc (NASDAQ:EZPW) to get a better sense of its popularity.
According to most shareholders, hedge funds are perceived as unimportant, old investment tools of years past. While there are more than 8000 funds trading today, Our researchers choose to focus on the moguls of this club, around 750 funds. These investment experts shepherd the majority of the smart money’s total capital, and by keeping track of their unrivaled picks, Insider Monkey has spotted numerous investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by nearly 5 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
Let’s take a glance at the latest hedge fund action surrounding Barrett Business Services, Inc. (NASDAQ:BBSI).
How are hedge funds trading Barrett Business Services, Inc. (NASDAQ:BBSI)?
Heading into the first quarter of 2019, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BBSI over the last 14 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.
According to Insider Monkey’s hedge fund database, Jim Simons’s Renaissance Technologies has the most valuable position in Barrett Business Services, Inc. (NASDAQ:BBSI), worth close to $23.3 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is C. Jonathan Gattman of Cloverdale Capital Management, with a $15.6 million position; 11% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Cliff Asness’s AQR Capital Management, Noam Gottesman’s GLG Partners and Israel Englander’s Millennium Management.
Judging by the fact that Barrett Business Services, Inc. (NASDAQ:BBSI) has faced falling interest from hedge fund managers, it’s safe to say that there is a sect of hedge funds that slashed their full holdings in the third quarter. Intriguingly, Jeffrey Talpins’s Element Capital Management dumped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $0.4 million in stock. Peter Muller’s fund, PDT Partners, also dumped its stock, about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Barrett Business Services, Inc. (NASDAQ:BBSI). We will take a look at Allied Motion Technologies, Inc. (NASDAQ:AMOT), CIRCOR International, Inc. (NYSE:CIR), EZCORP Inc (NASDAQ:EZPW), and Adams Natural Resources Fund, Inc. (NYSE:PEO). This group of stocks’ market valuations are closest to BBSI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMOT | 12 | 39294 | -2 |
| CIR | 6 | 98829 | 1 |
| EZPW | 20 | 106153 | 1 |
| PEO | 3 | 1894 | 1 |
| Average | 10.25 | 61543 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $65 million in BBSI’s case. EZCORP Inc (NASDAQ:EZPW) is the most popular stock in this table. On the other hand Adams Natural Resources Fund, Inc. (NYSE:PEO) is the least popular one with only 3 bullish hedge fund positions. Barrett Business Services, Inc. (NASDAQ:BBSI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on BBSI as the stock returned 32.8% and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
