Is BGS A Good Stock To Buy Now?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of B&G Foods, Inc. (NYSE:BGS) based on that data.

Is BGS a good stock to buy now? B&G Foods, Inc. (NYSE:BGS) was in 15 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. BGS investors should be aware of an increase in hedge fund interest in recent months. There were 13 hedge funds in our database with BGS positions at the end of the second quarter. Our calculations also showed that BGS 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.

According to most market participants, hedge funds are perceived as worthless, outdated financial tools of yesteryear. While there are over 8000 funds trading at the moment, We hone in on the crème de la crème of this club, approximately 850 funds. Most estimates calculate that this group of people administer most of the smart money’s total capital, and by keeping track of their best investments, Insider Monkey has found several investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually 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 .

NAVELLIER & ASSOCIATES

Louis Navellier of Navellier & Associates

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. Keeping this in mind let’s review the new hedge fund action surrounding B&G Foods, Inc. (NYSE:BGS).

Do Hedge Funds Think BGS Is A Good Stock To Buy Now?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in BGS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in B&G Foods, Inc. (NYSE:BGS), which was worth $12.4 million at the end of the third quarter. On the second spot was PEAK6 Capital Management which amassed $11.4 million worth of shares. Balyasny Asset Management, Citadel Investment Group, and Citadel Investment Group 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 Factorial Partners allocated the biggest weight to B&G Foods, Inc. (NYSE:BGS), around 1.5% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.38 percent of its 13F equity portfolio to BGS.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Gotham Asset Management, managed by Joel Greenblatt, created the most outsized position in B&G Foods, Inc. (NYSE:BGS). Gotham Asset Management had $1.3 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also made a $0.6 million investment in the stock during the quarter. The other funds with brand new BGS positions are Hoon Kim’s Quantinno Capital, Michael Gelband’s ExodusPoint Capital, and Louis Navellier’s Navellier & Associates.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as B&G Foods, Inc. (NYSE:BGS) but similarly valued. We will take a look at Dana Incorporated (NYSE:DAN), Empire State Realty Trust Inc (NYSE:ESRT), Herman Miller, Inc. (NASDAQ:MLHR), Commscope Holding Company Inc (NASDAQ:COMM), CNX Resources Corporation (NYSE:CNX), Macy’s, Inc. (NYSE:M), and Federal Signal Corporation (NYSE:FSS). This group of stocks’ market values are similar to BGS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DAN 22 163106 -3
ESRT 17 161290 -2
MLHR 23 121547 1
COMM 30 482875 -2
CNX 33 581481 5
M 28 363563 -8
FSS 16 47491 4
Average 24.1 274479 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $274 million. That figure was $38 million in BGS’s case. CNX Resources Corporation (NYSE:CNX) is the most popular stock in this table. On the other hand Federal Signal Corporation (NYSE:FSS) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks B&G Foods, Inc. (NYSE:BGS) is even less popular than FSS. Our overall hedge fund sentiment score for BGS is 29.5. 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. Hedge funds dodged a bullet by taking a bearish stance towards BGS. Our calculations showed that the top 20 most popular hedge fund stocks 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 but managed to beat the market again by 15.8 percentage points. Unfortunately BGS wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BGS investors were disappointed as the stock returned 4.8% since the end of the third quarter (through 12/14) 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 most of these stocks already outperformed the market so far in 2020.

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