In this article we will take a look at whether hedge funds think Brunswick Corporation (NYSE:BC) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Brunswick Corporation (NYSE:BC) a buy, sell, or hold? Investors who are in the know were becoming hopeful. The number of bullish hedge fund positions increased by 1 recently. Brunswick Corporation (NYSE:BC) was in 39 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that BC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 38 hedge funds in our database with BC holdings at the end of June.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let's view the fresh hedge fund action surrounding Brunswick Corporation (NYSE:BC).
Michael Lowenstein of Kensico Capital
Do Hedge Funds Think BC Is A Good Stock To Buy Now?
At Q3's end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BC over the last 25 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Cantillon Capital Management was the largest shareholder of Brunswick Corporation (NYSE:BC), with a stake worth $390.5 million reported as of the end of September. Trailing Cantillon Capital Management was Arrowstreet Capital, which amassed a stake valued at $154.5 million. Kensico Capital, Shellback Capital, and Lakewood Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Shellback Capital allocated the biggest weight to Brunswick Corporation (NYSE:BC), around 3.84% of its 13F portfolio. Kensico Capital is also relatively very bullish on the stock, setting aside 3.64 percent of its 13F equity portfolio to BC.
As industrywide interest jumped, key hedge funds were leading the bulls' herd. Balyasny Asset Management, managed by Dmitry Balyasny, established the biggest position in Brunswick Corporation (NYSE:BC). Balyasny Asset Management had $11.3 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also initiated a $1.8 million position during the quarter. The other funds with brand new BC positions are David Harding's Winton Capital Management, Peter Algert's Algert Global, and John A. Levin's Levin Capital Strategies.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Brunswick Corporation (NYSE:BC) but similarly valued. These stocks are First American Financial Corp (NYSE:FAF), Capri Holdings Limited (NYSE:CPRI), IAA, Inc. (NYSE:IAA), Alaska Air Group, Inc. (NYSE:ALK), PVH Corp (NYSE:PVH), Pearson PLC (NYSE:PSO), and Chemed Corporation (NYSE:CHE). This group of stocks' market valuations resemble BC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FAF,29,1505467,-2 CPRI,46,833450,2 IAA,33,714704,0 ALK,41,647583,3 PVH,38,2157407,10 PSO,8,15064,1 CHE,20,272040,-10 Average,30.7,877959,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.7 hedge funds with bullish positions and the average amount invested in these stocks was $878 million. That figure was $1090 million in BC's case. Capri Holdings Limited (NYSE:CPRI) is the most popular stock in this table. On the other hand Pearson PLC (NYSE:PSO) is the least popular one with only 8 bullish hedge fund positions. Brunswick Corporation (NYSE:BC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BC is 74.6. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately BC wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BC were disappointed as the stock returned -1.1% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.