Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Blucora Inc (NASDAQ:BCOR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is BCOR a good stock to buy now? Blucora Inc (NASDAQ:BCOR) investors should pay attention to a decrease in hedge fund interest in recent months. Blucora Inc (NASDAQ:BCOR) was in 18 hedge funds’ portfolios at the end of September. The all time high for this statistic is 23. Our calculations also showed that BCOR 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).
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 formulas market participants have at their disposal to analyze their stock investments. A couple of the most under-the-radar formulas are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the broader indices by a solid margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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 we’re going to take a peek at the key hedge fund action regarding Blucora Inc (NASDAQ:BCOR).
Do Hedge Funds Think BCOR Is A Good Stock To Buy Now?
At the end of September, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BCOR over the last 21 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Armistice Capital held the most valuable stake in Blucora Inc (NASDAQ:BCOR), which was worth $28.3 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $21.2 million worth of shares. D E Shaw, Two Sigma Advisors, and Tudor Investment Corp 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 Armistice Capital allocated the biggest weight to Blucora Inc (NASDAQ:BCOR), around 1.03% of its 13F portfolio. Archon Capital Management is also relatively very bullish on the stock, setting aside 0.42 percent of its 13F equity portfolio to BCOR.
Due to the fact that Blucora Inc (NASDAQ:BCOR) has experienced declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of fund managers that decided to sell off their positions entirely in the third quarter. At the top of the heap, Roger Ibbotson’s Zebra Capital Management sold off the biggest position of all the hedgies followed by Insider Monkey, valued at close to $0.2 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund dropped about $0.2 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to Blucora Inc (NASDAQ:BCOR). These stocks are Camden National Corporation (NASDAQ:CAC), Donnelley Financial Solutions, Inc. (NYSE:DFIN), WideOpenWest, Inc. (NYSE:WOW), Juniper Industrial Holdings, Inc. (NYSE:JIH), Cowen Inc. (NASDAQ:COWN), The First Bancshares, Inc. (MS) (NASDAQ:FBMS), and Antares Pharma Inc (NASDAQ:ATRS). This group of stocks’ market caps are closest to BCOR’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 15.6 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $74 million in BCOR’s case. Juniper Industrial Holdings, Inc. (NYSE:JIH) is the most popular stock in this table. On the other hand The First Bancshares, Inc. (MS) (NASDAQ:FBMS) is the least popular one with only 7 bullish hedge fund positions. Blucora Inc (NASDAQ:BCOR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BCOR is 63.1. 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. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on BCOR as the stock returned 39.5% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.