In this article we will take a look at whether hedge funds think BrightSphere Investment Group plc (NYSE:BSIG) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is BrightSphere Investment Group plc (NYSE:BSIG) the right investment to pursue these days? Investors who are in the know are in a pessimistic mood. The number of bullish hedge fund bets retreated by 6 recently. Our calculations also showed that BSIG 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.
In the 21st century investor’s toolkit there are a large number of gauges stock traders have at their disposal to assess publicly traded companies. A couple of the most useful gauges are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can outpace the S&P 500 by a superb amount (see the details here).
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 trades like this one. 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 let’s analyze the recent hedge fund action regarding BrightSphere Investment Group plc (NYSE:BSIG).
How have hedgies been trading BrightSphere Investment Group plc (NYSE:BSIG)?
At Q1’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards BSIG over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Paulson & Co, managed by John Paulson, holds the biggest position in BrightSphere Investment Group plc (NYSE:BSIG). Paulson & Co has a $127.8 million position in the stock, comprising 4.9% of its 13F portfolio. Sitting at the No. 2 spot is Mangrove Partners, managed by Nathaniel August, which holds a $27.1 million position; the fund has 3.7% of its 13F portfolio invested in the stock. Remaining peers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Paulson & Co allocated the biggest weight to BrightSphere Investment Group plc (NYSE:BSIG), around 4.88% of its 13F portfolio. Mangrove Partners is also relatively very bullish on the stock, setting aside 3.74 percent of its 13F equity portfolio to BSIG.
Due to the fact that BrightSphere Investment Group plc (NYSE:BSIG) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few funds that slashed their entire stakes by the end of the first quarter. Interestingly, Lee Ainslie’s Maverick Capital dropped the biggest stake of all the hedgies monitored by Insider Monkey, valued at close to $4.8 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund dumped about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds by the end of the first quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BrightSphere Investment Group plc (NYSE:BSIG) but similarly valued. These stocks are Usa Compression Partners LP (NYSE:USAC), Lakeland Bancorp, Inc. (NASDAQ:LBAI), Arbor Realty Trust, Inc. (NYSE:ABR), and LendingClub Corp (NYSE:LC). This group of stocks’ market caps resemble BSIG’s market cap.
|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 9 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $185 million in BSIG’s case. Arbor Realty Trust, Inc. (NYSE:ABR) is the most popular stock in this table. On the other hand Usa Compression Partners LP (NYSE:USAC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks BrightSphere Investment Group plc (NYSE:BSIG) is more popular among hedge funds. 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 returned 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on BSIG as the stock returned 63.9% so far in Q2 (through June 17th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.