Is Big Lots, Inc. (BIG) Going to Burn These Hedge Funds?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Big Lots, Inc. (NYSE:BIG).

Big Lots, Inc. (NYSE:BIG) has seen an increase in hedge fund interest lately. BIG was in 19 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with BIG positions at the end of the previous quarter. Our calculations also showed that BIG 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.


Let’s take a look at the fresh hedge fund action surrounding Big Lots, Inc. (NYSE:BIG).

How are hedge funds trading Big Lots, Inc. (NYSE:BIG)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from the second quarter of 2018. By comparison, 20 hedge funds held shares or bullish call options in BIG heading into this year. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).


The largest stake in Big Lots, Inc. (NYSE:BIG) was held by AQR Capital Management, which reported holding $82.6 million worth of stock at the end of September. It was followed by Holocene Advisors with a $35.1 million position. Other investors bullish on the company included Maverick Capital, Renaissance Technologies, and GLG Partners.

Consequently, some big names have jumped into Big Lots, Inc. (NYSE:BIG) headfirst. Holocene Advisors, managed by Brandon Haley, initiated the largest call position in Big Lots, Inc. (NYSE:BIG). Holocene Advisors had $35.1 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $10.4 million position during the quarter. The other funds with new positions in the stock are John Tompkins’s Tyvor Capital, Steve Cohen’s Point72 Asset Management, and Sander Gerber’s Hudson Bay Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Big Lots, Inc. (NYSE:BIG) but similarly valued. These stocks are Bitauto Hldg Ltd (NYSE:BITA), Diodes Incorporated (NASDAQ:DIOD), Fidelity NASDAQ Composite Tr Stk ETF (NASDAQ:ONEQ), and Inphi Corporation (NYSE:IPHI). All of these stocks’ market caps are closest to BIG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BITA 7 68643 2
DIOD 17 71062 1
ONEQ 2 1239 0
IPHI 14 198990 3
Average 10 84984 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $196 million in BIG’s case. Diodes Incorporated (NASDAQ:DIOD) is the most popular stock in this table. On the other hand Fidelity NASDAQ Composite Tr Stk ETF (NASDAQ:ONEQ) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Big Lots, Inc. (NYSE:BIG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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