Hedge Funds Are Crazy About StoneX Group Inc. (SNEX)

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards StoneX Group Inc. (NASDAQ:SNEX).

StoneX Group Inc. (NASDAQ:SNEX) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. StoneX Group Inc. (NASDAQ:SNEX) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 9 hedge funds in our database with SNEX positions at the end of the first quarter. Our calculations also showed that SNEX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Jeffrey Bronchick of Cove Street Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the radar stock. We go through lists like the 10 best growth stocks to buy 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 review the fresh hedge fund action encompassing StoneX Group Inc. (NASDAQ:SNEX).

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

At the end of June, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 122% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SNEX over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Nine Ten Partners held the most valuable stake in StoneX Group Inc. (NASDAQ:SNEX), which was worth $66.4 million at the end of the second quarter. On the second spot was Private Capital Management which amassed $23.4 million worth of shares. AltraVue Capital, Cove Street Capital, and Royce & Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position AltraVue Capital allocated the biggest weight to StoneX Group Inc. (NASDAQ:SNEX), around 7.64% of its 13F portfolio. Nine Ten Partners is also relatively very bullish on the stock, earmarking 7.14 percent of its 13F equity portfolio to SNEX.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Prescott Group Capital Management, managed by Phil Frohlich, assembled the most valuable position in StoneX Group Inc. (NASDAQ:SNEX). Prescott Group Capital Management had $2.5 million invested in the company at the end of the quarter. Michael O’Keefe’s 12th Street Asset Management also made a $2.5 million investment in the stock during the quarter. The other funds with brand new SNEX positions are Mark Broach’s Manatuck Hill Partners, Renaissance Technologies, and Israel Englander’s Millennium Management.

Let’s go over hedge fund activity in other stocks similar to StoneX Group Inc. (NASDAQ:SNEX). These stocks are CTS Corporation (NYSE:CTS), H&E Equipment Services, Inc. (NASDAQ:HEES), Loral Space & Communications Inc (NASDAQ:LORL), Dril-Quip, Inc. (NYSE:DRQ), Laredo Petroleum Inc (NYSE:LPI), Five Point Holdings, LLC (NYSE:FPH), and Vanda Pharmaceuticals Inc. (NASDAQ:VNDA). All of these stocks’ market caps are closest to SNEX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $189 million. That figure was $156 million in SNEX’s case. Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is the most popular stock in this table. On the other hand Dril-Quip, Inc. (NYSE:DRQ) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks StoneX Group Inc. (NASDAQ:SNEX) is more popular among hedge funds. Our overall hedge fund sentiment score for SNEX is 90. 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. 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 returned 24% in 2021 through October 22nd but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on SNEX as the stock returned 17.2% since the end of June (through 10/22) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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