Here is What Hedge Funds Think About Berry Global Group Inc (BERY)
In this article we will take a look at whether hedge funds think Berry Global Group Inc (NYSE:BERY) 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.
Berry Global Group Inc (NYSE:BERY) was in 42 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 53. BERY has experienced an increase in support from the world's most elite money managers lately. There were 34 hedge funds in our database with BERY holdings at the end of December. Our calculations also showed that BERY isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Ricky Sandler of Eminence Capital
At Insider Monkey we leave no stone unturned when looking for 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, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we're going to check out the latest hedge fund action regarding Berry Global Group Inc (NYSE:BERY).
Do Hedge Funds Think BERY Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 42 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from one quarter earlier. On the other hand, there were a total of 34 hedge funds with a bullish position in BERY a year ago. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in Berry Global Group Inc (NYSE:BERY) was held by Eminence Capital, which reported holding $316.9 million worth of stock at the end of December. It was followed by Canyon Capital Advisors with a $242.5 million position. Other investors bullish on the company included Lyrical Asset Management, Two Creeks Capital Management, and GMT Capital. In terms of the portfolio weights assigned to each position Bayberry Capital Partners allocated the biggest weight to Berry Global Group Inc (NYSE:BERY), around 12.13% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, dishing out 9.67 percent of its 13F equity portfolio to BERY.
As industrywide interest jumped, some big names have jumped into Berry Global Group Inc (NYSE:BERY) headfirst. GMT Capital, managed by Thomas E. Claugus, initiated the most valuable position in Berry Global Group Inc (NYSE:BERY). GMT Capital had $86.2 million invested in the company at the end of the quarter. Jeffrey Gates's Gates Capital Management also made a $56.7 million investment in the stock during the quarter. The following funds were also among the new BERY investors: Israel Englander's Millennium Management, Brandon Haley's Holocene Advisors, and Donald Sussman's Paloma Partners.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Berry Global Group Inc (NYSE:BERY) but similarly valued. These stocks are Globant SA (NYSE:GLOB), Acceleron Pharma Inc (NASDAQ:XLRN), Beyond Meat, Inc. (NASDAQ:BYND), Polaris Inc. (NYSE:PII), Ares Capital Corporation (NASDAQ:ARCC), CyrusOne Inc (NASDAQ:CONE), and AerCap Holdings N.V. (NYSE:AER). This group of stocks' market caps resemble BERY's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLOB,17,323406,2 XLRN,31,1647100,-3 BYND,26,338693,-1 PII,29,510308,-2 ARCC,15,84000,0 CONE,21,202453,0 AER,43,1675105,3 Average,26,683009,-0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $683 million. That figure was $1404 million in BERY's case. AerCap Holdings N.V. (NYSE:AER) is the most popular stock in this table. On the other hand Ares Capital Corporation (NASDAQ:ARCC) is the least popular one with only 15 bullish hedge fund positions. Berry Global Group Inc (NYSE:BERY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BERY is 82. 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately BERY wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BERY were disappointed as the stock returned 2.9% since the end of March (through 6/18) 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.
