Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Bally’s Corporation (NYSE:BALY) in this article.
Is BALY stock a buy? Bally’s Corporation (NYSE:BALY) investors should be aware of an increase in enthusiasm from smart money lately. Bally’s Corporation (NYSE:BALY) was in 25 hedge funds’ portfolios at the end of December. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently reached a brand new all time high. Our calculations also showed that BALY isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Paul Reeder of PAR Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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. With all of this in mind we’re going to take a look at the fresh hedge fund action surrounding Bally’s Corporation (NYSE:BALY).
Do Hedge Funds Think BALY Is A Good Stock To Buy Now?
At Q4’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 47% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in BALY over the last 22 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, PAR Capital Management held the most valuable stake in Bally’s Corporation (NYSE:BALY), which was worth $138.2 million at the end of the fourth quarter. On the second spot was Contrarius Investment Management which amassed $44.3 million worth of shares. GLG Partners, Driehaus Capital, and Solus Alternative Asset Management 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 Solus Alternative Asset Management allocated the biggest weight to Bally’s Corporation (NYSE:BALY), around 6.54% of its 13F portfolio. Collaborative Holdings Management is also relatively very bullish on the stock, setting aside 5.95 percent of its 13F equity portfolio to BALY.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. PAR Capital Management, managed by Paul Reeder and Edward Shapiro, established the most valuable position in Bally’s Corporation (NYSE:BALY). PAR Capital Management had $138.2 million invested in the company at the end of the quarter. Stephen Mildenhall’s Contrarius Investment Management also initiated a $44.3 million position during the quarter. The other funds with new positions in the stock are Noam Gottesman’s GLG Partners, Richard Driehaus’s Driehaus Capital, and Christopher Pucillo’s Solus Alternative Asset Management.
Let’s check out hedge fund activity in other stocks similar to Bally’s Corporation (NYSE:BALY). We will take a look at Inseego Corp. (NASDAQ:INSG), LTC Properties Inc (NYSE:LTC), Aurora Cannabis Inc. (NYSE:ACB), Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX), HeadHunter Group PLC (NASDAQ:HHR), Industrial Logistics Properties Trust (NASDAQ:ILPT), and Fortuna Silver Mines Inc. (NYSE:FSM). This group of stocks’ market valuations are closest to BALY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INSG | 16 | 52617 | 5 |
| LTC | 8 | 6128 | -1 |
| ACB | 10 | 14646 | 0 |
| FMTX | 17 | 775269 | 7 |
| HHR | 7 | 9076 | -1 |
| ILPT | 8 | 9277 | -1 |
| FSM | 11 | 29768 | -2 |
| Average | 11 | 128112 | 1 |
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As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $128 million. That figure was $343 million in BALY’s case. Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX) is the most popular stock in this table. On the other hand HeadHunter Group PLC (NASDAQ:HHR) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Bally’s Corporation (NYSE:BALY) is more popular among hedge funds. Our overall hedge fund sentiment score for BALY is 90. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on BALY as the stock returned 13.2% since the end of December (through 4/19) 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.
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Disclosure: None. This article was originally published at Insider Monkey.