Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don't make them change their opinion towards a company. This time it may be different. During the fourth quarter of 2018 we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Ball Corporation (NYSE:BLL) to find out whether it was one of their high conviction long-term ideas.
Is Ball Corporation (NYSE:BLL) the right investment to pursue these days? Money managers are becoming hopeful. The number of bullish hedge fund positions advanced by 13 lately. That's a very large increase for a stock that had only 20 hedge funds with bullish positions at the end of September.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a peek at the new hedge fund action regarding Ball Corporation (NYSE:BLL).
What does the smart money think about Ball Corporation (NYSE:BLL)?
At the end of the fourth quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 65% from one quarter earlier. On the other hand, there were a total of 27 hedge funds with a bullish position in BLL a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Ball Corporation (NYSE:BLL) was held by Rivulet Capital, which reported holding $156.8 million worth of stock at the end of September. It was followed by Chilton Investment Company with a $146.5 million position. Other investors bullish on the company included Iridian Asset Management, Brookside Capital, and Citadel Investment Group.