Here is What Hedge Funds Think About 1-800-FLOWERS.COM, Inc. (FLWS)

In this article you are going to find out whether hedge funds think 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) was in 22 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 27. FLWS has experienced a decrease in hedge fund sentiment lately. There were 27 hedge funds in our database with FLWS positions at the end of the fourth quarter. Our calculations also showed that FLWS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. Now we’re going to take a gander at the latest hedge fund action regarding 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS).

Do Hedge Funds Think FLWS Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FLWS over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is FLWS A Good Stock To Buy?

The largest stake in 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) was held by GAMCO Investors, which reported holding $16.1 million worth of stock at the end of December. It was followed by Shannon River Fund Management with a $13.1 million position. Other investors bullish on the company included Citadel Investment Group, Beddow Capital Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Beddow Capital Management allocated the biggest weight to 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), around 2.07% of its 13F portfolio. Horseman Capital Management is also relatively very bullish on the stock, dishing out 1.25 percent of its 13F equity portfolio to FLWS.

Because 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers that slashed their full holdings in the first quarter. Interestingly, Mark Coe’s Intrinsic Edge Capital cut the largest investment of all the hedgies tracked by Insider Monkey, worth close to $24.2 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $4.4 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 5 funds in the first quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) but similarly valued. These stocks are Horace Mann Educators Corporation (NYSE:HMN), GMS Inc. (NYSE:GMS), ArcBest Corp (NASDAQ:ARCB), Virtus Investment Partners Inc (NASDAQ:VRTS), Ping Identity Holding Corp. (NYSE:PING), BGC Partners, Inc. (NASDAQ:BGCP), and Lakeland Financial Corporation (NASDAQ:LKFN). All of these stocks’ market caps resemble FLWS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HMN 14 43951 1
GMS 19 266527 3
ARCB 13 87202 -1
VRTS 20 143608 0
PING 11 873908 -5
BGCP 21 305412 -3
LKFN 9 15719 2
Average 15.3 248047 -0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.3 hedge funds with bullish positions and the average amount invested in these stocks was $248 million. That figure was $63 million in FLWS’s case. BGC Partners, Inc. (NASDAQ:BGCP) is the most popular stock in this table. On the other hand Lakeland Financial Corporation (NASDAQ:LKFN) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) is more popular among hedge funds. Our overall hedge fund sentiment score for FLWS is 74.4. 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 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Unfortunately FLWS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FLWS were disappointed as the stock returned 4.8% since the end of the first quarter (through 7/16) 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.

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