Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds’ top consensus picks. This year hedge funds’ top 30 stock picks outperformed the S&P 500 Index by 4 percentage points through the middle of November. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Is BOK Financial Corporation (NASDAQ:BOKF) worth your attention right now? The smart money is taking an optimistic view. The number of long hedge fund bets advanced by 2 in recent months. Our calculations also showed that BOKF isn’t among the 30 most popular stocks among hedge funds. BOKF was in 16 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with BOKF holdings at the end of the previous quarter.
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 flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a look at the fresh hedge fund action surrounding BOK Financial Corporation (NASDAQ:BOKF).
What does the smart money think about BOK Financial Corporation (NASDAQ:BOKF)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in BOKF at the beginning of this year. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
More specifically, Diamond Hill Capital was the largest shareholder of BOK Financial Corporation (NASDAQ:BOKF), with a stake worth $63.6 million reported as of the end of September. Trailing Diamond Hill Capital was Citadel Investment Group, which amassed a stake valued at $58.8 million. Ariel Investments, Royce & Associates, and Balyasny Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, some big names have jumped into BOK Financial Corporation (NASDAQ:BOKF) headfirst. Carlson Capital, managed by Clint Carlson, created the largest position in BOK Financial Corporation (NASDAQ:BOKF). Carlson Capital had $11.2 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also initiated a $9.8 million position during the quarter. The other funds with brand new BOKF positions are Michael Platt and William Reeves’s BlueCrest Capital Mgmt. and Alec Litowitz and Ross Laser’s Magnetar Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as BOK Financial Corporation (NASDAQ:BOKF) but similarly valued. We will take a look at EQM Midstream Partners, LP (NYSE:EQM), Signature Bank (NASDAQ:SBNY), The Toro Company (NYSE:TTC), and Acuity Brands, Inc. (NYSE:AYI). This group of stocks’ market caps are similar to BOKF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EQM | 8 | 69301 | 0 |
| SBNY | 25 | 538826 | 7 |
| TTC | 21 | 498911 | -2 |
| AYI | 35 | 1284391 | 7 |
| Average | 22.25 | 597857 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $598 million. That figure was $306 million in BOKF’s case. Acuity Brands, Inc. (NYSE:AYI) is the most popular stock in this table. On the other hand EQM Midstream Partners, LP (NYSE:EQM) is the least popular one with only 8 bullish hedge fund positions. BOK Financial Corporation (NASDAQ:BOKF) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AYI might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
