Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of BlackRock Resources (NYSE:BCX).
BlackRock Resources (NYSE:BCX) has seen an increase in support from the world’s most elite money managers of late. BCX was in 6 hedge funds’ portfolios at the end of March. There were 2 hedge funds in our database with BCX holdings at the end of the previous quarter. Our calculations also showed that BCX isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to analyze the latest hedge fund action surrounding BlackRock Resources (NYSE:BCX).
How have hedgies been trading BlackRock Resources (NYSE:BCX)?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 200% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BCX over the last 18 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 stakes considerably (or already accumulated large positions).
More specifically, Intrinsic Edge Capital was the largest shareholder of BlackRock Resources (NYSE:BCX), with a stake worth $1 million reported as of the end of September. Trailing Intrinsic Edge Capital was GRT Capital Partners, which amassed a stake valued at $0.3 million. Clough Capital Partners, Ancora Advisors, 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 GRT Capital Partners allocated the biggest weight to BlackRock Resources (NYSE:BCX), around 0.41% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, designating 0.13 percent of its 13F equity portfolio to BCX.
Consequently, key hedge funds have jumped into BlackRock Resources (NYSE:BCX) headfirst. Intrinsic Edge Capital, managed by Mark Coe, established the biggest position in BlackRock Resources (NYSE:BCX). Intrinsic Edge Capital had $1 million invested in the company at the end of the quarter. Charles Clough’s Clough Capital Partners also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new BCX investors: Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks similar to BlackRock Resources (NYSE:BCX). These stocks are Echo Global Logistics, Inc. (NASDAQ:ECHO), American Software, Inc. (NASDAQ:AMSWA), American Outdoor Brands Corporation (NASDAQ:AOBC), and First Foundation Inc (NASDAQ:FFWM). All of these stocks’ market caps resemble BCX’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 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $2 million in BCX’s case. American Outdoor Brands Corporation (NASDAQ:AOBC) is the most popular stock in this table. On the other hand American Software, Inc. (NASDAQ:AMSWA) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks BlackRock Resources (NYSE:BCX) is even less popular than AMSWA. Hedge funds clearly dropped the ball on BCX as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on BCX as the stock returned 28.9% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.