A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Embraer SA (ADR) (NYSE:ERJ).
Is Embraer SA (ADR) (NYSE:ERJ) a splendid investment right now? The best stock pickers are indeed in a bullish mood. The number of bullish hedge fund investments went up by 1 in recent months. There were 11 hedge funds in our database with ERJ holdings at the end of the 2016 third quarter. At the end of this article we will also compare ERJ to other stocks including PDC Energy Inc (NASDAQ:PDCE), Piedmont Office Realty Trust, Inc. (NYSE:PDM), and CLARCOR Inc. (NYSE:CLC) to get a better sense of its popularity.
Follow Embraer S A (NYSE:ERJ)
Follow Embraer S A (NYSE:ERJ)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a peek at the fresh action regarding Embraer SA (ADR) (NYSE:ERJ).
What does the smart money think about Embraer SA (ADR) (NYSE:ERJ)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 10% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in ERJ heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world, holds the number one position in Embraer SA (ADR) (NYSE:ERJ). According to regulatory filings, the fund has a $27.4 million position in the stock, comprising less than 0.1% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, holding a $10.8 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish comprise John Overdeck and David Siegel’s Two Sigma Advisors, David Halpert’s Prince Street Capital Management and Matthew Hulsizer’s PEAK6 Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As industrywide interest jumped, key money managers have jumped into Embraer SA (ADR) (NYSE:ERJ) headfirst. Prince Street Capital Management established the most outsized position in Embraer SA (ADR) (NYSE:ERJ). The fund reportedly had $2 million invested in the company at the end of the quarter. David Kowitz and Sheldon Kasowitz’s Indus Capital also made a $0.4 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Embraer SA (ADR) (NYSE:ERJ) but similarly valued. These stocks are PDC Energy Inc (NASDAQ:PDCE), Piedmont Office Realty Trust, Inc. (NYSE:PDM), CLARCOR Inc. (NYSE:CLC), and Harbinger Group Inc (NYSE:HRG). This group of stocks’ market caps are similar to ERJ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PDCE | 22 | 278279 | 5 |
| PDM | 10 | 211041 | 0 |
| CLC | 12 | 108660 | -2 |
| HRG | 27 | 1541968 | 2 |
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $535 million. That figure was $47 million in ERJ’s case. Harbinger Group Inc (NYSE:HRG) is the most popular stock in this table. On the other hand Piedmont Office Realty Trust, Inc. (NYSE:PDM) is the least popular one with only 10 bullish hedge fund positions. Embraer SA (ADR) (NYSE:ERJ) 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. In this regard HRG might be a better candidate to consider taking a long position in.
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