The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Bel Fuse, Inc. (NASDAQ:BELFA) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Hedge fund interest in Bel Fuse, Inc. (NASDAQ:BELFA) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BELFA 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). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Lyra Therapeutics, Inc. (NASDAQ:LYRA), Western New England Bancorp, Inc. (NASDAQ:WNEB), and First Internet Bancorp (NASDAQ:INBK) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 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.
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 10 most profitable companies in the world 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. With all of this in mind we’re going to take a peek at the recent hedge fund action surrounding Bel Fuse, Inc. (NASDAQ:BELFA).
How are hedge funds trading Bel Fuse, Inc. (NASDAQ:BELFA)?
At third quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BELFA over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Bel Fuse, Inc. (NASDAQ:BELFA). GAMCO Investors has a $2.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Oaktree Capital Management, managed by Howard Marks, which holds a $0.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions consist of Chuck Royce’s Royce & Associates, Renaissance Technologies and . In terms of the portfolio weights assigned to each position GAMCO Investors allocated the biggest weight to Bel Fuse, Inc. (NASDAQ:BELFA), around 0.03% of its 13F portfolio. Oaktree Capital Management is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to BELFA.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now take a look at hedge fund activity in other stocks similar to Bel Fuse, Inc. (NASDAQ:BELFA). These stocks are Lyra Therapeutics, Inc. (NASDAQ:LYRA), Western New England Bancorp, Inc. (NASDAQ:WNEB), First Internet Bancorp (NASDAQ:INBK), L.B. Foster Company (NASDAQ:FSTR), Inmune Bio Inc. (NASDAQ:INMB), Aytu BioScience, Inc. (NASDAQ:AYTU), and Orrstown Financial Services, Inc. (NASDAQ:ORRF). This group of stocks’ market caps match BELFA’s market cap.
|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 5.6 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $5 million in BELFA’s case. L.B. Foster Company (NASDAQ:FSTR) is the most popular stock in this table. On the other hand Western New England Bancorp, Inc. (NASDAQ:WNEB) is the least popular one with only 3 bullish hedge fund positions. Bel Fuse, Inc. (NASDAQ:BELFA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BELFA is 40.6. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on BELFA as the stock returned 26.1% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.