The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Smith & Wesson Brands, Inc. (NASDAQ:SWBI) and determine whether the smart money was really smart about this stock.
Smith & Wesson Brands, Inc. (NASDAQ:SWBI) was in 24 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. SWBI shareholders have witnessed an increase in enthusiasm from smart money lately. There were 22 hedge funds in our database with SWBI positions at the end of the first quarter. Our calculations also showed that SWBI isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
To the average investor there are many metrics shareholders can use to analyze their holdings. A pair of the most innovative metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite fund managers can trounce the S&P 500 by a very impressive amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Keeping this in mind let’s go over the latest hedge fund action regarding Smith & Wesson Brands, Inc. (NASDAQ:SWBI).
Hedge fund activity in Smith & Wesson Brands, Inc. (NASDAQ:SWBI)
At Q2’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in SWBI over the last 20 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Smith & Wesson Brands, Inc. (NASDAQ:SWBI) was held by Renaissance Technologies, which reported holding $80.9 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $20.4 million position. Other investors bullish on the company included Citadel Investment Group, Two Sigma Advisors, and D E Shaw. In terms of the portfolio weights assigned to each position Blue Grotto Capital allocated the biggest weight to Smith & Wesson Brands, Inc. (NASDAQ:SWBI), around 2.17% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, earmarking 1.37 percent of its 13F equity portfolio to SWBI.
As one would reasonably expect, some big names were breaking ground themselves. G2 Investment Partners Management, managed by Josh Goldberg, assembled the most valuable position in Smith & Wesson Brands, Inc. (NASDAQ:SWBI). G2 Investment Partners Management had $5.8 million invested in the company at the end of the quarter. Blair Baker’s Precept Capital Management also made a $3 million investment in the stock during the quarter. The other funds with brand new SWBI positions are Noam Gottesman’s GLG Partners, Mark Broach’s Manatuck Hill Partners, and Crispin Odey’s Odey Asset Management Group.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Smith & Wesson Brands, Inc. (NASDAQ:SWBI) but similarly valued. We will take a look at Banco Macro SA (NYSE:BMA), Veoneer, Inc. (NASDAQ:VNE), Compugen Ltd. (NASDAQ:CGEN), EnLink Midstream LLC (NYSE:ENLC), Amerisafe, Inc. (NASDAQ:AMSF), Perficient, Inc. (NASDAQ:PRFT), and BrightView Holdings, Inc. (NYSE:BV). All of these stocks’ market caps resemble SWBI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $144 million in SWBI’s case. Perficient, Inc. (NASDAQ:PRFT) is the most popular stock in this table. On the other hand EnLink Midstream LLC (NYSE:ENLC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Smith & Wesson Brands, Inc. (NASDAQ:SWBI) is more popular among hedge funds. Our overall hedge fund sentiment score for SWBI is 87. 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 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 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. Unfortunately SWBI wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SWBI were disappointed as the stock returned -3.7% since the end of 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.