Endurance International Group Hldgs Inc (EIGI): Hedge Funds Are Snapping Up

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Endurance International Group Hldgs Inc (NASDAQ:EIGI).

Endurance International Group Hldgs Inc (NASDAQ:EIGI) was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. EIGI has experienced an increase in enthusiasm from smart money lately. There were 12 hedge funds in our database with EIGI 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 Pinnacle Financial Partners (NASDAQ:PNFP), Silicon Laboratories (NASDAQ:SLAB), and CVB Financial Corp. (NASDAQ:CVBF) to gather more data points.

If you’d ask most traders, hedge funds are viewed as worthless, old financial tools of yesteryear. While there are more than 8000 funds trading today, We choose to focus on the bigwigs of this group, about 700 funds. These investment experts direct bulk of the hedge fund industry’s total asset base, and by following their inimitable equity investments, Insider Monkey has come up with several investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, let’s take a glance at the new action regarding Endurance International Group Hldgs Inc (NASDAQ:EIGI).

Hedge fund activity in Endurance International Group Hldgs Inc (NASDAQ:EIGI)

At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a surge of 50% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Roystone Capital Partners, managed by Richard Barrera, holds the biggest position in Endurance International Group Hldgs Inc (NASDAQ:EIGI). At the end of the quarter, the fund held a $84.8 million position in the stock, comprising 4.1% of its 13F portfolio. The second most bullish fund manager is Jericho Capital Asset Management, led by Josh Resnick, holding a $20.2 million position; 1.3% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish comprise Ahmet Okumus’s Okumus Fund Management, Eric Semler’s TCS Capital Management and Anand Parekh’s Alyeska Investment Group.

Consequently, key hedge funds were leading the bulls’ herd. Okumus Fund Management, managed by Ahmet Okumus, established the most valuable position in Endurance International Group Hldgs Inc (NASDAQ:EIGI) worth close to $15.9 million at the end of the quarter. Israel Englander’s Millennium Management also made a $1 million investment in the stock during the quarter. The following funds were also among the new EIGI investors: William C. Martin’s Raging Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Ken Griffin’s Citadel Investment Group.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Endurance International Group Hldgs Inc (NASDAQ:EIGI) but similarly valued. We will take a look at Pinnacle Financial Partners (NASDAQ:PNFP), Silicon Laboratories (NASDAQ:SLAB), CVB Financial Corp. (NASDAQ:CVBF), and Selective Insurance Group (NASDAQ:SIGI). This group of stocks’ market values are similar to EIGI’s market value.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $134 million in EIGI’s case, which significantly bolsters its case. Selective Insurance Group (NASDAQ:SIGI) is the most popular stock in this table. On the other hand CVB Financial Corp. (NASDAQ:CVBF) is the least popular one with only 5 bullish hedge fund positions. Although Endurance International Group Hldgs Inc (NASDAQ:EIGI) is just behind SIGI with 18 long hedge fund position, you should not hurry to dismiss it. We recommend an in-depth analysis of both stocks to find out which one is a better candidate for a long position.