Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Berry Global Group Inc (NYSE:BERY).
Is Berry Global Group Inc (NYSE:BERY) the right pick for your portfolio? Investors who are in the know were in a bearish mood. The number of bullish hedge fund bets fell by 5 lately. Berry Global Group Inc (NYSE:BERY) was in 37 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 53. Our calculations also showed that BERY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the eyes of most shareholders, hedge funds are perceived as slow, outdated financial tools of years past. While there are more than 8000 funds in operation at the moment, Our experts hone in on the bigwigs of this group, around 850 funds. It is estimated that this group of investors orchestrate the lion’s share of the hedge fund industry’s total capital, and by observing their top investments, Insider Monkey has determined numerous investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Thomas Claugus of GMT Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s go over the fresh hedge fund action surrounding Berry Global Group Inc (NYSE:BERY).
Do Hedge Funds Think BERY Is A Good Stock To Buy Now?
At the end of June, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the previous quarter. On the other hand, there were a total of 40 hedge funds with a bullish position in BERY a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in Berry Global Group Inc (NYSE:BERY) was held by Eminence Capital, which reported holding $293.7 million worth of stock at the end of June. It was followed by Canyon Capital Advisors with a $204.8 million position. Other investors bullish on the company included Lyrical Asset Management, Two Creeks Capital Management, and GMT Capital. In terms of the portfolio weights assigned to each position Atlantic Investment Management allocated the biggest weight to Berry Global Group Inc (NYSE:BERY), around 13.31% of its 13F portfolio. Bayberry Capital Partners is also relatively very bullish on the stock, earmarking 10.53 percent of its 13F equity portfolio to BERY.
Seeing as Berry Global Group Inc (NYSE:BERY) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds that slashed their entire stakes by the end of the second quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest investment of all the hedgies followed by Insider Monkey, comprising about $33.3 million in stock. John R. Wagner’s fund, SCW Capital Management, also dumped its stock, about $9.5 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 5 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Berry Global Group Inc (NYSE:BERY). These stocks are Pearson PLC (NYSE:PSO), Paysafe Limited (NYSE:PSFE), CyrusOne Inc (NASDAQ:CONE), Flex Ltd. (NASDAQ:FLEX), Commerce Bancshares, Inc. (NASDAQ:CBSH), Aegon N.V. (NYSE:AEG), and West Fraser Timber Co. Ltd. (NYSE:WFG). This group of stocks’ market caps are closest to BERY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PSO | 7 | 13925 | 1 |
| PSFE | 50 | 1124742 | 9 |
| CONE | 26 | 487917 | 5 |
| FLEX | 43 | 1463275 | -5 |
| CBSH | 16 | 75999 | 3 |
| AEG | 6 | 6164 | 0 |
| WFG | 25 | 591268 | 0 |
| Average | 24.7 | 537613 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.7 hedge funds with bullish positions and the average amount invested in these stocks was $538 million. That figure was $1370 million in BERY’s case. Paysafe Limited (NYSE:PSFE) is the most popular stock in this table. On the other hand Aegon N.V. (NYSE:AEG) is the least popular one with only 6 bullish hedge fund positions. Berry Global Group Inc (NYSE:BERY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BERY is 56.2. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and beat the market again by 4.4 percentage points. Unfortunately BERY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BERY were disappointed as the stock returned -7.9% since the end of June (through 10/11) 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 many of these stocks already outperformed the market since 2019.
Follow Berry Global Group Inc. (NYSE:BERY)
Follow Berry Global Group Inc. (NYSE:BERY)
Suggested Articles:
- 20 Most Gay Friendly Countries
- Top 20 Richest People In The World
- 12 Biggest 3D Companies In The World
Disclosure: None. This article was originally published at Insider Monkey.
