Is BRKL A Good Stock To Buy Now?

We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Brookline Bancorp, Inc. (NASDAQ:BRKL) based on that data.

Is BRKL a good stock to buy now? Brookline Bancorp, Inc. (NASDAQ:BRKL) was in 13 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 15. BRKL investors should be aware of an increase in hedge fund sentiment of late. There were 11 hedge funds in our database with BRKL positions at the end of the second quarter. Our calculations also showed that BRKL 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.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Bernard Horn of Polaris Capital Management

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. Now let’s take a peek at the key hedge fund action regarding Brookline Bancorp, Inc. (NASDAQ:BRKL).

Do Hedge Funds Think BRKL Is A Good Stock To Buy Now?

At third quarter’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in BRKL a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Brookline Bancorp, Inc. (NASDAQ:BRKL) was held by Renaissance Technologies, which reported holding $17.5 million worth of stock at the end of September. It was followed by Polaris Capital Management with a $11.2 million position. Other investors bullish on the company included Elizabeth Park Capital Management, Arrowstreet Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Brookline Bancorp, Inc. (NASDAQ:BRKL), around 1.52% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, setting aside 0.55 percent of its 13F equity portfolio to BRKL.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Elizabeth Park Capital Management, managed by Fred Cummings, initiated the largest position in Brookline Bancorp, Inc. (NASDAQ:BRKL). Elizabeth Park Capital Management had $2.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $1.7 million position during the quarter. The other funds with brand new BRKL positions are Paul Marshall and Ian Wace’s Marshall Wace LLP and Benjamin A. Smith’s Laurion Capital Management.

Let’s now review hedge fund activity in other stocks similar to Brookline Bancorp, Inc. (NASDAQ:BRKL). We will take a look at Oaktree Specialty Lending Corporation (NASDAQ:OCSL), Oxford Industries, Inc. (NYSE:OXM), Tivity Health, Inc. (NASDAQ:TVTY), American Finance Trust, Inc. (NASDAQ:AFIN), Foundation Building Materials, Inc. (NYSE:FBM), SI-BONE, Inc. (NASDAQ:SIBN), and Core Laboratories N.V. (NYSE:CLB). This group of stocks’ market values are closest to BRKL’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OCSL 14 48848 2
OXM 8 34340 -4
TVTY 17 233432 1
AFIN 11 8551 1
FBM 13 77199 4
SIBN 19 163493 3
CLB 16 113946 -3
Average 14 97116 0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $38 million in BRKL’s case. SI-BONE, Inc. (NASDAQ:SIBN) is the most popular stock in this table. On the other hand Oxford Industries, Inc. (NYSE:OXM) is the least popular one with only 8 bullish hedge fund positions. Brookline Bancorp, Inc. (NASDAQ:BRKL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BRKL is 55.7. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on BRKL as the stock returned 40.7% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

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