The latest 13F reporting period has come and gone, and 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. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Bruker Corporation (NASDAQ:BRKR) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Bruker Corporation (NASDAQ:BRKR) investors should pay attention to an increase in hedge fund sentiment recently. Bruker Corporation (NASDAQ:BRKR) was in 28 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 21 hedge funds in our database with BRKR positions at the end of the first quarter. Our calculations also showed that BRKR 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 take a gander at the key hedge fund action encompassing Bruker Corporation (NASDAQ:BRKR).
What have hedge funds been doing with Bruker Corporation (NASDAQ:BRKR)?
At the end of June, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. On the other hand, there were a total of 27 hedge funds with a bullish position in BRKR a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, D E Shaw was the largest shareholder of Bruker Corporation (NASDAQ:BRKR), with a stake worth $34.9 million reported as of the end of September. Trailing D E Shaw was Tower House Partners, which amassed a stake valued at $30.4 million. Renaissance Technologies, Arrowstreet Capital, and Alyeska Investment Group 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 Tower House Partners allocated the biggest weight to Bruker Corporation (NASDAQ:BRKR), around 14.68% of its 13F portfolio. Pennant Capital Management is also relatively very bullish on the stock, earmarking 1.29 percent of its 13F equity portfolio to BRKR.
Now, key money managers were leading the bulls’ herd. Tower House Partners, managed by Paolo Mortarotti, assembled the most outsized position in Bruker Corporation (NASDAQ:BRKR). Tower House Partners had $30.4 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $16.2 million position during the quarter. The other funds with new positions in the stock are Alan Fournier’s Pennant Capital Management, Donald Sussman’s Paloma Partners, and Michael Rockefeller and KarláKroeker’s Woodline Partners.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Bruker Corporation (NASDAQ:BRKR) but similarly valued. We will take a look at TIM Participacoes SA (NYSE:TSU), Anaplan, Inc. (NYSE:PLAN), MKS Instruments, Inc. (NASDAQ:MKSI), PRA Health Sciences Inc (NASDAQ:PRAH), Herbalife Nutrition Ltd. (NYSE:HLF), LPL Financial Holdings Inc (NASDAQ:LPLA), and BanColombia S.A. (NYSE:CIB). This group of stocks’ market values resemble BRKR’s market value.
|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 31 hedge funds with bullish positions and the average amount invested in these stocks was $981 million. That figure was $189 million in BRKR’s case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 9 bullish hedge fund positions. Bruker Corporation (NASDAQ:BRKR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BRKR is 63.8. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market by 17.7 percentage points. Unfortunately BRKR wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); BRKR investors were disappointed as the stock returned -3.6% since Q2 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.