Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Is E*TRADE Financial Corporation (NASDAQ:ETFC) going to take off soon? The smart money is getting more optimistic. The number of long hedge fund positions rose by 3 recently. ETFC was in 54 hedge funds’ portfolios at the end of the third quarter of 2015. There were 51 hedge funds in our database with ETFC holdings at the end of the previous quarter. 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 Oneok Partners LP (NYSE:OKS), Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC), and Oaktree Capital Group LLC (NYSE:OAK) to gather more data points.
Follow E Trade Financial Corp (NASDAQ:ETFC)
Follow E Trade Financial Corp (NASDAQ:ETFC)
Keeping this in mind, we’re going to take a peek at the recent action regarding E*TRADE Financial Corporation (NASDAQ:ETFC).
Hedge fund activity in E*TRADE Financial Corporation (NASDAQ:ETFC)
At Q3’s end, a total of 54 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Blue Ridge Capital, managed by John Griffin, holds the biggest position in E*TRADE Financial Corporation (NASDAQ:ETFC). Blue Ridge Capital has an $115.9 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by Robert Pohly of Samlyn Capital, with an $111.8 million position; 2% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism consist of Leon Cooperman’s Omega Advisors, John Smith Clark’s Southpoint Capital Advisors and Alan Fournier’s Pennant Capital Management.
Consequently, some big names were breaking ground themselves. Pennant Capital Management, managed by Alan Fournier, created the largest position in E*TRADE Financial Corporation (NASDAQ:ETFC). Pennant Capital Management had $87.2 million invested in the company at the end of the quarter. David Rodriguez-Fraile’s BlueMar Capital Management also initiated an $7.2 million position during the quarter. The following funds were also among the new ETFC investors: Anton Schutz’s Mendon Capital Advisors, Lawrence Sapanski’s Scoria Capital, and Mike Vranos’s Ellington.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as E*TRADE Financial Corporation (NASDAQ:ETFC) but similarly valued. We will take a look at Oneok Partners LP (NYSE:OKS), Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC), Oaktree Capital Group LLC (NYSE:OAK), and Fortune Brands Home & Security Inc (NYSE:FBHS). This group of stocks’ market values are similar to ETFC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OKS | 8 | 35260 | -1 |
| TKC | 7 | 27743 | 0 |
| OAK | 13 | 119918 | 0 |
| FBHS | 18 | 213796 | 4 |
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was $1,048 million in ETFC’s case. Fortune Brands Home & Security Inc (NYSE:FBHS) is the most popular stock in this table. On the other hand Turkcell Iletisim Hizmetleri A.S. (ADR) (NYSE:TKC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks E*TRADE Financial Corporation (NASDAQ:ETFC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
