The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Ensco plc (NYSE:ESV) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Ensco plc (NYSE:ESV) a great investment today? Hedge funds are in an optimistic mood. The number of bullish hedge fund positions moved up by 2 recently. Our calculations also showed that ESV isn’t among the 30 most popular stocks among hedge funds. ESV was in 29 hedge funds’ portfolios at the end of the third quarter of 2018. There were 27 hedge funds in our database with ESV positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to the beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the fresh hedge fund action regarding Ensco plc (NYSE:ESV).
What have hedge funds been doing with Ensco plc (NYSE:ESV)?
Heading into the fourth quarter of 2018, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. On the other hand, there were a total of 28 hedge funds with a bullish position in ESV at the beginning of this year. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Ensco plc (NYSE:ESV) was held by Greenlight Capital, which reported holding $168.8 million worth of stock at the end of September. It was followed by Odey Asset Management Group with a $108.6 million position. Other investors bullish on the company included Millennium Management, Orbis Investment Management, and Renaissance Technologies.
As industrywide interest jumped, specific money managers were breaking ground themselves. Blue Mountain Capital, managed by Andrew Feldstein and Stephen Siderow, created the most valuable position in Ensco plc (NYSE:ESV). Blue Mountain Capital had $37.9 million invested in the company at the end of the quarter. Yi Xin’s Ariose Capital also made a $29.3 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Bruce Kovner’s Caxton Associates LP, and Mark Broach’s Manatuck Hill Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ensco plc (NYSE:ESV) but similarly valued. We will take a look at Manchester United PLC (NYSE:MANU), Delek US Holdings, Inc. (NYSE:DK), Semtech Corporation (NASDAQ:SMTC), and Adient plc (NYSE:ADNT). All of these stocks’ market caps are similar to ESV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MANU | 8 | 95726 | 0 |
| DK | 31 | 403699 | 2 |
| SMTC | 13 | 134391 | 1 |
| ADNT | 29 | 706243 | 3 |
| Average | 20.25 | 335 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $335 million. That figure was $677 million in ESV’s case. Delek US Holdings, Inc. (NYSE:DK) is the most popular stock in this table. On the other hand Manchester United PLC (NYSE:MANU) is the least popular one with only 8 bullish hedge fund positions. Ensco plc (NYSE:ESV) 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 DK might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
