Hedge Funds Are Cashing Out Of JELD-WEN Holding, Inc. (JELD)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of JELD-WEN Holding, Inc. (NYSE:JELD).

Is JELD-WEN Holding, Inc. (NYSE:JELD) a buy, sell, or hold? Hedge funds were turning less bullish. The number of long hedge fund bets shrunk by 4 in recent months. JELD-WEN Holding, Inc. (NYSE:JELD) was in 23 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that JELD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Chuck Royce of Royce & Associates

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a look at the new hedge fund action regarding JELD-WEN Holding, Inc. (NYSE:JELD).

Do Hedge Funds Think JELD Is A Good Stock To Buy Now?

At second quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JELD over the last 24 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Richard S. Pzena’s Pzena Investment Management has the largest position in JELD-WEN Holding, Inc. (NYSE:JELD), worth close to $172.1 million, amounting to 0.7% of its total 13F portfolio. On Pzena Investment Management’s heels is Levin Easterly Partners, managed by John Murphy, which holds a $12.6 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions include Chuck Royce’s Royce & Associates, Israel Englander’s Millennium Management and Ed Bosek’s BeaconLight Capital. In terms of the portfolio weights assigned to each position Soapstone Capital allocated the biggest weight to JELD-WEN Holding, Inc. (NYSE:JELD), around 3.07% of its 13F portfolio. BeaconLight Capital is also relatively very bullish on the stock, designating 3.01 percent of its 13F equity portfolio to JELD.

Judging by the fact that JELD-WEN Holding, Inc. (NYSE:JELD) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedge funds that elected to cut their entire stakes in the second quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the biggest stake of all the hedgies monitored by Insider Monkey, comprising about $24.8 million in stock, and Frank Fu’s CaaS Capital was right behind this move, as the fund cut about $9.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds in the second quarter.

Let’s check out hedge fund activity in other stocks similar to JELD-WEN Holding, Inc. (NYSE:JELD). These stocks are First Interstate Bancsystem Inc (NASDAQ:FIBK), Mednax Inc. (NYSE:MD), Prestige Consumer Healthcare Inc. (NYSE:PBH), Barnes Group Inc. (NYSE:B), Golub Capital BDC Inc (NASDAQ:GBDC), Telephone & Data Systems, Inc. (NYSE:TDS), and O-I Glass, Inc. (NYSE:OI). This group of stocks’ market values are similar to JELD’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $152 million. That figure was $274 million in JELD’s case. O-I Glass, Inc. (NYSE:OI) is the most popular stock in this table. On the other hand First Interstate Bancsystem Inc (NASDAQ:FIBK) is the least popular one with only 12 bullish hedge fund positions. JELD-WEN Holding, Inc. (NYSE:JELD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JELD is 70.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately JELD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JELD were disappointed as the stock returned 2.6% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.