Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Hamilton Beach Brands Holding Company (NYSE:HBB) in this article.
Is HBB a good stock to buy now? Money managers were getting more optimistic. The number of long hedge fund bets went up by 1 lately. Hamilton Beach Brands Holding Company (NYSE:HBB) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 7. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HBB 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). There were 7 hedge funds in our database with HBB positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are dozens of indicators market participants employ to evaluate stocks. Some of the less known indicators are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the S&P 500 by a significant amount (see the details here).
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 let’s check out the key hedge fund action encompassing Hamilton Beach Brands Holding Company (NYSE:HBB).
Hedge fund activity in Hamilton Beach Brands Holding Company (NYSE:HBB)
At third quarter’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the second quarter of 2020. On the other hand, there were a total of 6 hedge funds with a bullish position in HBB a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Invenomic Capital Management, managed by Ali Motamed, holds the biggest position in Hamilton Beach Brands Holding Company (NYSE:HBB). Invenomic Capital Management has a $1.4 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $1.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish contain Martin Whitman’s Third Avenue Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Invenomic Capital Management allocated the biggest weight to Hamilton Beach Brands Holding Company (NYSE:HBB), around 0.77% of its 13F portfolio. Third Avenue Management is also relatively very bullish on the stock, designating 0.17 percent of its 13F equity portfolio to HBB.
As one would reasonably expect, key hedge funds were leading the bulls’ herd. Third Avenue Management, managed by Martin Whitman, assembled the largest position in Hamilton Beach Brands Holding Company (NYSE:HBB). Third Avenue Management had $1.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $0.3 million investment in the stock during the quarter. The only other fund with a brand new HBB position is Renaissance Technologies.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hamilton Beach Brands Holding Company (NYSE:HBB) but similarly valued. We will take a look at Verso Corporation (NYSE:VRS), Selecta Biosciences, Inc. (NASDAQ:SELB), Turtle Beach Corp (NASDAQ:HEAR), Citi Trends, Inc. (NASDAQ:CTRN), Agile Therapeutics Inc (NASDAQ:AGRX), NuCana plc (NASDAQ:NCNA), and ORBCOMM Inc (NASDAQ:ORBC). This group of stocks’ market values are closest to HBB’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 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $6 million in HBB’s case. Selecta Biosciences, Inc. (NASDAQ:SELB) is the most popular stock in this table. On the other hand NuCana plc (NASDAQ:NCNA) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Hamilton Beach Brands Holding Company (NYSE:HBB) is even less popular than NCNA. Our overall hedge fund sentiment score for HBB is 36. 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. Hedge funds dodged a bullet by taking a bearish stance towards HBB. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd but managed to beat the market again by 16 percentage points. Unfortunately HBB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); HBB investors were disappointed as the stock returned -6.6% since the end of the third quarter (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.