Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Belden Inc. (BDC) A Good Stock To Buy?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the first 6 weeks of the fourth quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Belden Inc. (NYSE:BDC) to find out whether it was one of their high conviction long-term ideas.

Belden Inc. (NYSE:BDC) has seen a decrease in activity from the world’s largest hedge funds lately. Our calculations also showed that BDC isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

CITADEL INVESTMENT GROUP

We’re going to take a gander at the fresh hedge fund action surrounding Belden Inc. (NYSE:BDC).

How are hedge funds trading Belden Inc. (NYSE:BDC)?

At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BDC over the last 13 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

BDC_dec2018

More specifically, Basswood Capital was the largest shareholder of Belden Inc. (NYSE:BDC), with a stake worth $3.9 million reported as of the end of September. Trailing Basswood Capital was Citadel Investment Group, which amassed a stake valued at $2.2 million. Prescott Group Capital Management, Marshall Wace LLP, and PEAK6 Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

Due to the fact that Belden Inc. (NYSE:BDC) has faced declining sentiment from hedge fund managers, it’s safe to say that there is a sect of hedge funds that elected to cut their positions entirely in the third quarter. It’s worth mentioning that Alexander Roepers’s Atlantic Investment Management dropped the largest investment of all the hedgies watched by Insider Monkey, valued at about $4.5 million in stock, and Joshua Nash’s Ulysses Management was right behind this move, as the fund dropped about $1.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds in the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Belden Inc. (NYSE:BDC) but similarly valued. These stocks are Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), Adtalem Global Education Inc. (NYSE:ATGE), Eventbrite, Inc. (NYSE:EB), and Orbotech Ltd. (NASDAQ:ORBK). This group of stocks’ market values are closest to BDC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SBGI 31 568387 -2
ATGE 16 210396 2
EB 20 592474 20
ORBK 27 587111 3
Average 23.5 489592 5.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $490 million. That figure was $12 million in BDC’s case. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) is the most popular stock in this table. On the other hand Adtalem Global Education Inc. (NYSE:ATGE) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Belden Inc. (NYSE:BDC) is even less popular than ATGE. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...