Is Hanesbrands Inc. (HBI) Going to Burn These Hedge Funds?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Hanesbrands Inc. (NYSE:HBI).

Hanesbrands Inc. (NYSE:HBI) investors should pay attention to an increase in support from the world’s most elite money managers recently. Hanesbrands Inc. (NYSE:HBI) was in 34 hedge funds’ portfolios at the end of September. The all time high for this statistic is 42. There were 33 hedge funds in our database with HBI positions at the end of the second quarter. Our calculations also showed that HBI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s go over the fresh hedge fund action surrounding Hanesbrands Inc. (NYSE:HBI).

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

At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. By comparison, 36 hedge funds held shares or bullish call options in HBI 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.

Is HBI A Good Stock To Buy?

Among these funds, Lyrical Asset Management held the most valuable stake in Hanesbrands Inc. (NYSE:HBI), which was worth $213.6 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $48.6 million worth of shares. Two Sigma Advisors, Candlestick Capital Management, and Prentice Capital Management 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 Prentice Capital Management allocated the biggest weight to Hanesbrands Inc. (NYSE:HBI), around 5.12% of its 13F portfolio. Lyrical Asset Management is also relatively very bullish on the stock, setting aside 2.74 percent of its 13F equity portfolio to HBI.

Now, key money managers were breaking ground themselves. Candlestick Capital Management, managed by Jack Woodruff, initiated the biggest position in Hanesbrands Inc. (NYSE:HBI). Candlestick Capital Management had $29.2 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $12.5 million position during the quarter. The following funds were also among the new HBI investors: Anand Parekh’s Alyeska Investment Group, Qing Li’s Sciencast Management, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hanesbrands Inc. (NYSE:HBI) but similarly valued. We will take a look at ASGN Incorporated (NYSE:ASGN), New York Community Bancorp, Inc. (NYSE:NYCB), FIGS Inc. (NYSE:FIGS), Leggett & Platt, Inc. (NYSE:LEG), Power Integrations Inc (NASDAQ:POWI), Ingredion Incorporated (NYSE:INGR), and Red Rock Resorts, Inc. (NASDAQ:RRR). This group of stocks’ market caps match HBI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASGN 11 43470 -4
NYCB 27 482594 -3
FIGS 21 821787 21
LEG 16 56164 2
POWI 24 192517 3
INGR 20 391796 -1
RRR 26 439302 0
Average 20.7 346804 2.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $347 million. That figure was $501 million in HBI’s case. New York Community Bancorp, Inc. (NYSE:NYCB) is the most popular stock in this table. On the other hand ASGN Incorporated (NYSE:ASGN) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Hanesbrands Inc. (NYSE:HBI) is more popular among hedge funds. Our overall hedge fund sentiment score for HBI is 80.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately HBI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HBI were disappointed as the stock returned -5.1% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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