Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Endurance Specialty Holdings Ltd. (NYSE:ENH), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Endurance Specialty Holdings Ltd. (NYSE:ENH) has experienced an increase in activity from the world’s largest hedge funds in recent months. ENH was in 22 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with ENH holdings at the end of the previous quarter. At the end of this article we will also compare ENH to other stocks, including Cullen/Frost Bankers, Inc. (NYSE:CFR), Mercadolibre Inc (NASDAQ:MELI), and IPG Photonics Corporation (NASDAQ:IPGP) to get a better sense of its popularity.
Follow Endurance Specialty Holdings Ltd (NYSE:ENH)
Follow Endurance Specialty Holdings Ltd (NYSE:ENH)
To most market participants, hedge funds are seen as underperforming, old financial tools of years past. While there are more than 8000 funds in operation today, Our experts look at the leaders of this club, around 700 funds. These investment experts orchestrate most of the smart money’s total asset base, and by shadowing their matchless picks, Insider Monkey has determined numerous investment strategies that have historically beaten the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Keeping this in mind, we’re going to take a look at the latest action regarding Endurance Specialty Holdings Ltd. (NYSE:ENH).
What does the smart money think about Endurance Specialty Holdings Ltd. (NYSE:ENH)?
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a jump of 47% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Pzena Investment Management, run by Richard S. Pzena, holds the biggest position in Endurance Specialty Holdings Ltd. (NYSE:ENH). The fund has a $44.8 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Scott Wallace of Wallace Capital Management, with a $36.5 million stake; the fund has 6.7% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and David Dreman’s Dreman Value Management.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Wallace Capital Management, managed by Scott Wallace, initiated the biggest position in Endurance Specialty Holdings Ltd. (NYSE:ENH), valued at $36.5 million as noted above. Chao Ku’s Nine Chapters Capital Management also made a $3.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Jay Petschek and Steven Major’s Corsair Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Matthew Tewksbury’s Stevens Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Endurance Specialty Holdings Ltd. (NYSE:ENH) but similarly valued. We will take a look at Cullen/Frost Bankers, Inc. (NYSE:CFR), Mercadolibre Inc (NASDAQ:MELI), IPG Photonics Corporation (NASDAQ:IPGP), and Casey’s General Stores, Inc. (NASDAQ:CASY). All of these stocks’ market caps resemble ENH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CFR | 15 | 51427 | 4 |
| MELI | 14 | 286423 | 0 |
| IPGP | 24 | 146698 | 0 |
| CASY | 21 | 158714 | 7 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $161 million. In the case of ENH, that figure was $228 million. IPG Photonics Corporation (NASDAQ:IPGP) is the star of this group, while Mercadolibre Inc (NASDAQ:MELI) is the outsider with only 14 bullish hedge fund positions. Endurance Specialty Holdings Ltd. (NYSE:ENH) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard IPGP might be a better candidate to consider a long position.
