The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Booz Allen Hamilton Holding Corporation (NYSE:BAH).
Is BAH a good stock to buy? Hedge funds were taking an optimistic view. The number of long hedge fund bets moved up by 6 recently. Booz Allen Hamilton Holding Corporation (NYSE:BAH) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. Our calculations also showed that BAH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 25 hedge funds in our database with BAH positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are seen as underperforming, old investment tools of the past. While there are more than 8000 funds in operation today, We hone in on the upper echelon of this group, around 850 funds. These money managers direct most of the hedge fund industry’s total asset base, and by shadowing their top picks, Insider Monkey has found numerous investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Now let’s take a glance at the latest hedge fund action encompassing Booz Allen Hamilton Holding Corporation (NYSE:BAH).
Do Hedge Funds Think BAH Is A Good Stock To Buy Now?
At the end of September, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from the previous quarter. On the other hand, there were a total of 35 hedge funds with a bullish position in BAH a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Booz Allen Hamilton Holding Corporation (NYSE:BAH) was held by AQR Capital Management, which reported holding $56.1 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $43.6 million position. Other investors bullish on the company included Holocene Advisors, Renaissance Technologies, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Game Creek Capital allocated the biggest weight to Booz Allen Hamilton Holding Corporation (NYSE:BAH), around 2.43% of its 13F portfolio. Sciencast Management is also relatively very bullish on the stock, designating 0.38 percent of its 13F equity portfolio to BAH.
As one would reasonably expect, some big names were leading the bulls’ herd. Holocene Advisors, managed by Brandon Haley, established the most valuable position in Booz Allen Hamilton Holding Corporation (NYSE:BAH). Holocene Advisors had $37.8 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $5.2 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Lee Ainslie’s Maverick Capital, and Jinghua Yan’s TwinBeech Capital.
Let’s check out hedge fund activity in other stocks similar to Booz Allen Hamilton Holding Corporation (NYSE:BAH). These stocks are Autohome Inc (NYSE:ATHM), Natura &Co Holding S.A. (NYSE:NTCO), The Liberty SiriusXM Group (NASDAQ:LSXMA), Cable One Inc (NYSE:CABO), Hasbro, Inc. (NASDAQ:HAS), W.P. Carey Inc. (NYSE:WPC), and Cognex Corporation (NASDAQ:CGNX). This group of stocks’ market caps resemble BAH’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 24 hedge funds with bullish positions and the average amount invested in these stocks was $531 million. That figure was $267 million in BAH’s case. The Liberty SiriusXM Group (NASDAQ:LSXMA) is the most popular stock in this table. On the other hand Natura &Co Holding S.A. (NYSE:NTCO) is the least popular one with only 4 bullish hedge fund positions. Booz Allen Hamilton Holding Corporation (NYSE:BAH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BAH is 72.1. 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. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and beat the market again by 16.4 percentage points. Unfortunately BAH wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on BAH were disappointed as the stock returned 8.6% since the end of September (through 12/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.