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Hedge Funds Keep Selling Saul Centers Inc (BFS)

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Saul Centers Inc (NYSE:BFS) based on that data.

Saul Centers Inc (NYSE:BFS) investors should be aware of a decrease in hedge fund sentiment lately. BFS was in 7 hedge funds’ portfolios at the end of March. There were 8 hedge funds in our database with BFS holdings at the end of the previous quarter. Our calculations also showed that BFS isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 most stock holders, hedge funds are viewed as underperforming, old financial vehicles of the past. While there are more than 8000 funds in operation today, Our experts hone in on the crème de la crème of this group, around 850 funds. These investment experts administer most of the smart money’s total capital, and by tailing their finest picks, Insider Monkey has unearthed a few investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to review the new hedge fund action encompassing Saul Centers Inc (NYSE:BFS).

What have hedge funds been doing with Saul Centers Inc (NYSE:BFS)?

At Q1’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the fourth quarter of 2019. By comparison, 10 hedge funds held shares or bullish call options in BFS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of Saul Centers Inc (NYSE:BFS), with a stake worth $19 million reported as of the end of September. Trailing Renaissance Technologies was GLG Partners, which amassed a stake valued at $2.3 million. Millennium Management, AQR Capital Management, and Two Sigma Advisors 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 Renaissance Technologies allocated the biggest weight to Saul Centers Inc (NYSE:BFS), around 0.02% of its 13F portfolio. GLG Partners is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to BFS.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Zebra Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified BFS as a viable investment and initiated a position in the stock.

Let’s go over hedge fund activity in other stocks similar to Saul Centers Inc (NYSE:BFS). These stocks are Raven Industries, Inc. (NASDAQ:RAVN), Teekay LNG Partners L.P. (NYSE:TGP), Perdoceo Education Corporation (NASDAQ:PRDO), and Matthews International Corp (NASDAQ:MATW). This group of stocks’ market caps match BFS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RAVN 11 73375 -2
TGP 10 38247 -3
PRDO 23 141084 4
MATW 9 33381 0
Average 13.25 71522 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $25 million in BFS’s case. Perdoceo Education Corporation (NASDAQ:PRDO) is the most popular stock in this table. On the other hand Matthews International Corp (NASDAQ:MATW) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Saul Centers Inc (NYSE:BFS) is even less popular than MATW. Hedge funds dodged a bullet by taking a bearish stance towards BFS. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately BFS wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); BFS investors were disappointed as the stock returned 14% during the second quarter (through June 10th) 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 so far in 2020.

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