Is Bel Fuse, Inc. (NASDAQ:BELFA) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Bel Fuse, Inc. (NASDAQ:BELFA) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds' portfolios at the end of the third quarter of 2019. 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 Malvern Bancorp, Inc. (NASDAQ:MLVF), IntriCon Corporation (NASDAQ:IIN), and Auburn National Bancorporation, Inc. (NASDAQ:AUBN) to gather more data points. 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 below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are numerous signals shareholders employ to size up stocks. A duo of the most innovative signals are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top fund managers can outclass the S&P 500 by a significant margin (see the details here).
Howard Marks of Oaktree Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Keeping this in mind we're going to review the key hedge fund action encompassing Bel Fuse, Inc. (NASDAQ:BELFA).
How have hedgies been trading Bel Fuse, Inc. (NASDAQ:BELFA)?
Heading into the fourth quarter of 2019, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in BELFA a year ago. With the smart money's sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Bel Fuse, Inc. (NASDAQ:BELFA). GAMCO Investors has a $3.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $1.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism consist of Howard Marks's Oaktree Capital Management, 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, earmarking 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 go over hedge fund activity in other stocks similar to Bel Fuse, Inc. (NASDAQ:BELFA). These stocks are Malvern Bancorp, Inc. (NASDAQ:MLVF), IntriCon Corporation (NASDAQ:IIN), Auburn National Bancorporation, Inc. (NASDAQ:AUBN), and Gencor Industries, Inc. (NASDAQ:GENC). This group of stocks' market values are similar to BELFA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MLVF,4,32062,0 IIN,9,23467,2 AUBN,2,708,-1 GENC,4,23922,1 Average,4.75,20040,0.5 [/table]
As you can see these stocks had an average of 4.75 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $6 million in BELFA's case. IntriCon Corporation (NASDAQ:IIN) is the most popular stock in this table. On the other hand Auburn National Bancorporation, Inc. (NASDAQ:AUBN) is the least popular one with only 2 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately BELFA wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BELFA investors were disappointed as the stock returned -1.2% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
