The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Bloomin’ Brands Inc (NASDAQ:BLMN).
Is BLMN a good stock to buy? Bloomin’ Brands Inc (NASDAQ:BLMN) investors should pay attention to an increase in enthusiasm from smart money in recent months. Bloomin’ Brands Inc (NASDAQ:BLMN) was in 30 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BLMN 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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. With all of this in mind we’re going to take a look at the recent hedge fund action regarding Bloomin’ Brands Inc (NASDAQ:BLMN).
Do Hedge Funds Think BLMN Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BLMN over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Bloomin’ Brands Inc (NASDAQ:BLMN) was held by JANA Partners, which reported holding $87 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $35.6 million position. Other investors bullish on the company included Millennium Management, Scopus Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position JANA Partners allocated the biggest weight to Bloomin’ Brands Inc (NASDAQ:BLMN), around 7.79% of its 13F portfolio. Kettle Hill Capital Management is also relatively very bullish on the stock, dishing out 1.33 percent of its 13F equity portfolio to BLMN.
As industrywide interest jumped, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, assembled the biggest position in Bloomin’ Brands Inc (NASDAQ:BLMN). Millennium Management had $30.6 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also initiated a $25.2 million position during the quarter. The following funds were also among the new BLMN investors: Andrew Kurita’s Kettle Hill Capital Management, Joseph Samuels’s Islet Management, and Brian J. Higgins’s King Street Capital.
Let’s also examine hedge fund activity in other stocks similar to Bloomin’ Brands Inc (NASDAQ:BLMN). We will take a look at Park National Corporation (NYSE:PRK), Gentherm Inc (NASDAQ:THRM), American Woodmark Corporation (NASDAQ:AMWD), BancFirst Corporation (NASDAQ:BANF), Sirius International Insurance Group, Ltd. (NASDAQ:SG), Gray Television, Inc. (NYSE:GTN), and Sangamo Therapeutics, Inc. (NASDAQ:SGMO). This group of stocks’ market values resemble BLMN’s market value.
|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 12.9 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $284 million in BLMN’s case. Sangamo Therapeutics, Inc. (NASDAQ:SGMO) is the most popular stock in this table. On the other hand Park National Corporation (NYSE:PRK) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Bloomin’ Brands Inc (NASDAQ:BLMN) is more popular among hedge funds. Our overall hedge fund sentiment score for BLMN is 90. 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 returned 33.3% in 2020 through December 18th but still managed to beat the market by 16.4 percentage points. Hedge funds were also right about betting on BLMN as the stock returned 21.9% since the end of September (through 12/18) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.