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The Case for Adding Briggs & Stratton Corporation (BGG) to Your Portfolio

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Briggs & Stratton Corporation (NYSE:BGG).

Is Briggs & Stratton Corporation (NYSE:BGG) worth your attention right now? The smart money is becoming hopeful. The number of bullish hedge fund positions rose by 5 in recent months. At the end of this article we will also compare BGG to other stocks including Orion Engineered Carbons SA (NYSE:OEC), Ebix Inc (NASDAQ:EBIX), and EnPro Industries, Inc. (NYSE:NPO) to get a better sense of its popularity.

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To most traders, hedge funds are perceived as unimportant, old financial tools of years past. While there are over 8,000 funds trading today, we look at the masters of this club, around 700 funds. Most estimates calculate that this group of people preside over bulk of the smart money’s total capital, and by shadowing their finest equity investments, Insider Monkey has identified many investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, we’re going to take a gander at the fresh action encompassing Briggs & Stratton Corporation (NYSE:BGG).

What does the smart money think about Briggs & Stratton Corporation (NYSE:BGG)?

At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 33% gain from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or had already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Daruma Asset Management, managed by Mariko Gordon, holds the largest position in Briggs & Stratton Corporation (NYSE:BGG). Daruma Asset Management has a $53.5 million position in the stock, comprising 3.3% of its 13F portfolio. Coming in second is Peter Schliemann of Rutabaga Capital Management, with a $23.9 million position; 2.9% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish consist of Chuck Royce’s Royce & Associates, Israel Englander’s Millennium Management, and Joel Greenblatt’s Gotham Asset Management.

As one would reasonably expect, key hedge funds have jumped into Briggs & Stratton Corporation (NYSE:BGG) headfirst. Gotham Asset Management initiated the largest position in Briggs & Stratton Corporation (NYSE:BGG). Gotham Asset Management had $9.1 million invested in the company at the end of the quarter. Renaissance Technologies also made an $8.1 million investment in the stock during the quarter. The other funds with brand new BGG positions are Crispin Odey’s Odey Asset Management Group, Neil Chriss’ Hutchin Hill Capital, and Mike Vranos’ Ellington.

Let’s go over hedge fund activity in other stocks similar to Briggs & Stratton Corporation (NYSE:BGG). These stocks are Orion Engineered Carbons SA (NYSE:OEC), Ebix Inc (NASDAQ:EBIX), EnPro Industries, Inc. (NYSE:NPO), and Nuveen Premium Income Municipal Fund Inc (NYSE:NPI). All of these stocks’ market caps are similar to BGG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OEC 18 123687 -3
EBIX 12 69282 -2
NPO 19 225981 -2
NPI 4 2577 0

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $105 million. That figure was $148 million in BGG’s case. EnPro Industries, Inc. (NYSE:NPO) is the most popular stock in this table. On the other hand Nuveen Premium Income Municipal Fund Inc (NYSE:NPI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Briggs & Stratton Corporation (NYSE:BGG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

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