Hedge funds and other institutional investors just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios at the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F records we can determine which stocks they are collectively bullish on. One of their picks is Brookfield Asset Management Inc. (NYSE: BAM), so let’s take a closer look at the sentiment around it in the current quarter.
Brookfield Asset Management Inc. (NYSE: BAM) stocks didn’t see much action in the second quarter. Overall, hedge fund sentiment remained unchanged. The stock was listed in 34 hedge fund portfolios at the end of the second quarter of 2021. Our calculations also showed that BAM is not in the top 30 most popular stocks among hedge funds (click for Q2 ranking). At the end of this article, we’ll also be comparing BAM to other stocks including Petroleo Brasileiro SA – Petrobras (NYSE: PBR), FedEx Corporation (NYSE: FDX) and The Bank of Nova Scotia (NYSE: BNS) to have a best idea. of its popularity.
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Hedge funds have over $ 3.5 trillion in assets under management, so you can’t expect all of their portfolios to beat the market with significant margins. Our research identified in advance a select group of hedge funds that have outperformed S&P 500 ETFs by more than 79 percentage points since March 2017 (see details here). So you can still find a lot of gems by following the movements of hedge funds today.
Tom Gayner of Markel Gayner Asset Management
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, we like undervalued growth stocks that are positive for EBITDA, so we are looking at pitches like this emerging biotechnology stocks. We go through lists like the top 10 electric vehicle stocks to pick the next Tesla that will deliver 10x yield. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can sign up for our free daily newsletter on our homepage. Now let’s take a look at the key stock of hedge funds encompassing Brookfield Asset Management Inc. (NYSE: BAM).
Do hedge funds think BAM is a good stock to buy now?
At the end of June, 34 of the hedge funds tracked by Insider Monkey held long positions in this security, a variation of 0% compared to the previous quarter. By comparison, 33 hedge funds held bullish stocks or call options in BAM a year ago. So let’s see which hedge funds were among the top stock holders and which hedge funds were making big moves.
Of these funds, Akre Capital Management had the largest stake in Brookfield Asset Management Inc. (NYSE: BAM), which stood at $ 664.8 million at the end of the second quarter. In second place was Markel Gayner Asset Management who raised $ 444.3 million in stocks. Viking Global, Horizon Asset Management and Third Avenue Management were also very fond of the stock, becoming one of the largest hedge fund holders in the company. In terms of the portfolio weights assigned to each position, Greenlea Lane Capital assigned the largest weight to Brookfield Asset Management Inc. (NYSE: BAM), approximately 11.92% of its 13F portfolio. Markel Gayner Asset Management is also relatively very bullish on the stock, setting aside 5.67% of his 13F equity portfolio at BAM.
Given that Brookfield Asset Management Inc. (NYSE: BAM) has seen a decline in interest from hedge fund managers, it’s easy to see that there was a specific group of hedges that chose to cut completely. their positions by the end of the second quarter. . At the top of the heap, Greg Poole’s Echo Street Capital Management dropped the biggest investment of all hedges, followed by Insider Monkey, valued at around $ 19.3 million in stock, and Sander Gerber’s Hudson Bay Capital Management was right. behind this move, because the fund cut about $ 6.7 million. These trades are interesting because the overall interest of hedge funds has remained the same (this is a bearish signal in our experience).
Now let’s take a look at the activity of hedge funds in other stocks similar to Brookfield Asset Management Inc. (NYSE: BAM). These stocks are Petroleo Brasileiro SA – Petrobras (NYSE: PBR), FedEx Corporation (NYSE: FDX), The Bank of Nova Scotia (NYSE: BNS), Mercadolibre Inc (NASDAQ: MELI), NetEase, Inc (NASDAQ: NTES), CME Group Inc (NASDAQ: CME) and Dell Technologies Inc. (NYSE: DELL). The market valuations of this group of shares correspond to the market valuation of BAM.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position PBR, 25.2799044, -2 FDX, 61.2170185, -2 BNS, 14.223095, -5 MELI, 74.4024188 , 5 NTES, 43.3720524.11 CME, 62.2649845,2 DELL, 62.5601143.8 Medium, 48.7,3026861,2,4 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 48.7 hedge funds with bullish positions and the average amount invested in these stocks was $ 3,027 million. That figure was $ 1658 million in the case of BAM. Mercadolibre Inc (NASDAQ: MELI) is the most popular stock in this chart. On the other hand, the Bank of Nova Scotia (NYSE: BNS) is the least popular with only 14 bullish hedge fund positions. Brookfield Asset Management Inc. (NYSE: BAM) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for BAM is 48.5. Stocks with a 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 the 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 21.8% in 2021 through October 11 and have consistently beaten the market by 4.4 percentage points. A small number of hedge funds were also right to bet on BAM as the stock has returned 10.5% since the end of the second quarter (through 11/10) and outperformed the market by an even larger margin.
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Disclosure: none. This article originally appeared on Insider Monkey.