How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Blink Charging Co. (NASDAQ:BLNK).
Is Blink Charging (BLNK) a good stock to buy now? BLNK investors should be aware of an increase in hedge fund interest in recent months. Blink Charging Co. (NASDAQ:BLNK) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BLNK 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 we’re going to take a look at the latest hedge fund action surrounding Blink Charging Co. (NASDAQ:BLNK).
How are hedge funds trading Blink Charging Co. (NASDAQ:BLNK)?
At third quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 150% from the second quarter of 2020. On the other hand, there were a total of 2 hedge funds with a bullish position in BLNK a year ago. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Till Bechtolsheimer’s Arosa Capital Management has the number one call position in Blink Charging Co. (NASDAQ:BLNK), worth close to $9.3 million, amounting to 1.4% of its total 13F portfolio. On Arosa Capital Management’s heels is Arosa Capital Management, managed by Till Bechtolsheimer, which holds a $6.4 million position; 1% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions comprise Bart Baum’s Ionic Capital Management, and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Arosa Capital Management allocated the biggest weight to Blink Charging Co. (NASDAQ:BLNK), around 1.43% of its 13F portfolio. Arosa Capital Management is also relatively very bullish on the stock, earmarking 0.99 percent of its 13F equity portfolio to BLNK.
Consequently, some big names were breaking ground themselves. Arosa Capital Management, managed by Till Bechtolsheimer, established the most valuable position in Blink Charging Co. (NASDAQ:BLNK). Arosa Capital Management had $6.4 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.3 million position during the quarter. The other funds with brand new BLNK positions are Donald Sussman’s Paloma Partners, Bart Baum’s Ionic Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Blink Charging Co. (NASDAQ:BLNK). We will take a look at Seneca Foods Corp (NASDAQ:SENEA), Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL), China Distance Education Hldgs Ltd (NYSE:DL), AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), Genesco Inc. (NYSE:GCO), Craft Brew Alliance Inc (NASDAQ:BREW), and Precision BioSciences, Inc. (NASDAQ:DTIL). This group of stocks’ market caps are closest to BLNK’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 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $12 million in BLNK’s case. Precision BioSciences, Inc. (NASDAQ:DTIL) is the most popular stock in this table. On the other hand China Distance Education Hldgs Ltd (NYSE:DL) is the least popular one with only 3 bullish hedge fund positions. Blink Charging Co. (NASDAQ:BLNK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BLNK is 47.1. 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 November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on BLNK as the stock returned 171.6% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.