In this article you are going to find out whether hedge funds think Hasbro, Inc. (NASDAQ:HAS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Hasbro (HAS) a good stock to buy now? Hasbro, Inc. (NASDAQ:HAS) shareholders have witnessed an increase in support from the world’s most elite money managers in recent months. Hasbro, Inc. (NASDAQ:HAS) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. There were 23 hedge funds in our database with HAS holdings at the end of June. Our calculations also showed that HAS 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 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 look at the new hedge fund action regarding Hasbro, Inc. (NASDAQ:HAS).
Do Hedge Funds Think HAS Is A Good Stock To Buy Now?
At the end of September, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 35% from one quarter earlier. On the other hand, there were a total of 32 hedge funds with a bullish position in HAS a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Hasbro, Inc. (NASDAQ:HAS) was held by Alyeska Investment Group, which reported holding $54.3 million worth of stock at the end of September. It was followed by Holocene Advisors with a $53.1 million position. Other investors bullish on the company included Scopus Asset Management, Balyasny Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position MIK Capital allocated the biggest weight to Hasbro, Inc. (NASDAQ:HAS), around 5.05% of its 13F portfolio. SG Capital Management is also relatively very bullish on the stock, earmarking 4.69 percent of its 13F equity portfolio to HAS.
As aggregate interest increased, key hedge funds were breaking ground themselves. Scopus Asset Management, managed by Alexander Mitchell, initiated the most outsized position in Hasbro, Inc. (NASDAQ:HAS). Scopus Asset Management had $50.8 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $40.5 million position during the quarter. The following funds were also among the new HAS investors: Ken Grossman and Glen Schneider’s SG Capital Management, Jack Woodruff’s Candlestick Capital Management, and Kamyar Khajavi’s MIK Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Hasbro, Inc. (NASDAQ:HAS) but similarly valued. These stocks are W.P. Carey Inc. (NYSE:WPC), Cognex Corporation (NASDAQ:CGNX), NovoCure Limited (NASDAQ:NVCR), Charles River Laboratories International Inc. (NYSE:CRL), Korea Electric Power Corporation (NYSE:KEP), Equity Lifestyle Properties, Inc. (NYSE:ELS), and Gartner Inc (NYSE:IT). This group of stocks’ market valuations are similar to HAS’s market valuation.
|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 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $582 million. That figure was $373 million in HAS’s case. Gartner Inc (NYSE:IT) is the most popular stock in this table. On the other hand Korea Electric Power Corporation (NYSE:KEP) is the least popular one with only 5 bullish hedge fund positions. Hasbro, Inc. (NASDAQ:HAS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HAS is 75.2. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on HAS as the stock returned 14.3% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.