As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about BWX Technologies Inc (NYSE:BWXT).
Is BWX Technologies Inc (NYSE:BWXT) worth your attention right now? Hedge funds were turning less bullish. The number of bullish hedge fund bets fell by 3 in recent months. BWX Technologies Inc (NYSE:BWXT) was in 16 hedge funds’ portfolios at the end of March. The all time high for this statistic is 34. Our calculations also showed that BWXT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 19 hedge funds in our database with BWXT positions at the end of the fourth quarter.
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Cliff Asness of AQR Capital Management
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Do Hedge Funds Think BWXT Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BWXT over the last 23 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in BWX Technologies Inc (NYSE:BWXT) was held by Cardinal Capital, which reported holding $115.5 million worth of stock at the end of December. It was followed by Mountaineer Partners Management with a $10.7 million position. Other investors bullish on the company included AQR Capital Management, Holocene Advisors, and Millennium Management. In terms of the portfolio weights assigned to each position Mountaineer Partners Management allocated the biggest weight to BWX Technologies Inc (NYSE:BWXT), around 7.49% of its 13F portfolio. Cardinal Capital is also relatively very bullish on the stock, setting aside 2.83 percent of its 13F equity portfolio to BWXT.
Judging by the fact that BWX Technologies Inc (NYSE:BWXT) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers that slashed their entire stakes last quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the biggest position of all the hedgies tracked by Insider Monkey, comprising close to $12 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund cut about $3.3 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 3 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as BWX Technologies Inc (NYSE:BWXT) but similarly valued. These stocks are Reynolds Consumer Products Inc. (NASDAQ:REYN), Silicon Laboratories (NASDAQ:SLAB), First American Financial Corp (NYSE:FAF), CACI International Inc (NYSE:CACI), BOK Financial Corporation (NASDAQ:BOKF), Ovintiv Inc. (NYSE:OVV), and Coherent, Inc. (NASDAQ:COHR). This group of stocks’ market values are closest to BWXT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| REYN | 19 | 153098 | 1 |
| SLAB | 18 | 142253 | 0 |
| FAF | 32 | 964771 | -7 |
| CACI | 21 | 632278 | -7 |
| BOKF | 17 | 454944 | -9 |
| OVV | 30 | 533700 | 4 |
| COHR | 41 | 1454406 | 19 |
| Average | 25.4 | 619350 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.4 hedge funds with bullish positions and the average amount invested in these stocks was $619 million. That figure was $155 million in BWXT’s case. Coherent, Inc. (NASDAQ:COHR) is the most popular stock in this table. On the other hand BOK Financial Corporation (NASDAQ:BOKF) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks BWX Technologies Inc (NYSE:BWXT) is even less popular than BOKF. Our overall hedge fund sentiment score for BWXT is 16.1. 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. Hedge funds dodged a bullet by taking a bearish stance towards BWXT. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.5% in 2021 through July 23rd but managed to beat the market again by 10.1 percentage points. Unfortunately BWXT wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); BWXT investors were disappointed as the stock returned -12.2% since the end of the first quarter (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Bwx Technologies Inc. (NYSE:BWXT)
Follow Bwx Technologies Inc. (NYSE:BWXT)
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Disclosure: None. This article was originally published at Insider Monkey.
