The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought E2open Parent Holdings, Inc. (NYSE:ETWO) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
E2open Parent Holdings, Inc. (NYSE:ETWO) has experienced a decrease in enthusiasm from smart money in recent months. E2open Parent Holdings, Inc. (NYSE:ETWO) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. There were 35 hedge funds in our database with ETWO holdings at the end of June. Our calculations also showed that ETWO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Ricky Sandler of Eminence Capital
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 we’re going to take a look at the recent hedge fund action regarding E2open Parent Holdings, Inc. (NYSE:ETWO).
Do Hedge Funds Think ETWO Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in ETWO over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in E2open Parent Holdings, Inc. (NYSE:ETWO) was held by Elliott Investment Management, which reported holding $282.5 million worth of stock at the end of September. It was followed by Windacre Partnership with a $282.1 million position. Other investors bullish on the company included Eminence Capital, Atalan Capital, and Shelter Haven Capital Management. In terms of the portfolio weights assigned to each position Shelter Haven Capital Management allocated the biggest weight to E2open Parent Holdings, Inc. (NYSE:ETWO), around 18.9% of its 13F portfolio. Altai Capital is also relatively very bullish on the stock, setting aside 13.23 percent of its 13F equity portfolio to ETWO.
Judging by the fact that E2open Parent Holdings, Inc. (NYSE:ETWO) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers that elected to cut their full holdings by the end of the third quarter. Interestingly, Christian Leone’s Luxor Capital Group sold off the largest position of all the hedgies tracked by Insider Monkey, valued at about $77.2 million in call options. Jerry Kochanski’s fund, Shelter Haven Capital Management, also said goodbye to its call options, about $25.6 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to E2open Parent Holdings, Inc. (NYSE:ETWO). We will take a look at Physicians Realty Trust (NYSE:DOC), Cornerstone OnDemand, Inc. (NASDAQ:CSOD), Yamana Gold Inc. (NYSE:AUY), Atlantica Sustainable Infrastructure plc (NASDAQ:AY), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), Sabre Corporation (NASDAQ:SABR), and CONMED Corporation (NASDAQ:CNMD). This group of stocks’ market valuations are closest to ETWO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DOC | 17 | 67746 | 1 |
| CSOD | 35 | 879376 | 10 |
| AUY | 15 | 127105 | -1 |
| AY | 10 | 36501 | -4 |
| IOVA | 33 | 1439061 | 3 |
| SABR | 31 | 877609 | -6 |
| CNMD | 21 | 180491 | 0 |
| Average | 23.1 | 515413 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $515 million. That figure was $1138 million in ETWO’s case. Cornerstone OnDemand, Inc. (NASDAQ:CSOD) is the most popular stock in this table. On the other hand Atlantica Sustainable Infrastructure plc (NASDAQ:AY) is the least popular one with only 10 bullish hedge fund positions. E2open Parent Holdings, Inc. (NYSE:ETWO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ETWO is 77.3. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, ETWO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ETWO were disappointed as the stock returned -17.7% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
Follow E2Open Parent Holdings Inc. (NYSE:ETWO)
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Disclosure: None. This article was originally published at Insider Monkey.
