It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during October and average hedge fund losing about 3%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 4 percentage points during the first half of Q4, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards EnerSys (NYSE:ENS) during the quarter below.
EnerSys (NYSE:ENS) investors should pay attention to a decrease in hedge fund interest in recent months. Our calculations also showed that ENS isn’t among the 30 most popular stocks among hedge funds.
According to most investors, hedge funds are seen as slow, outdated investment vehicles of yesteryear. While there are over 8,000 funds with their doors open at present, We look at the bigwigs of this group, about 700 funds. These money managers control the lion’s share of the hedge fund industry’s total capital, and by monitoring their highest performing picks, Insider Monkey has uncovered various investment strategies that have historically surpassed the market. Insider Monkey’s flagship hedge fund strategy beat the S&P 500 index by 6 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Let’s take a glance at the latest hedge fund action surrounding EnerSys (NYSE:ENS).
How have hedgies been trading EnerSys (NYSE:ENS)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ENS over the last 13 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in EnerSys (NYSE:ENS) was held by ACK Asset Management, which reported holding $37.6 million worth of stock at the end of September. It was followed by AQR Capital Management with a $26.2 million position. Other investors bullish on the company included D E Shaw, Royce & Associates, and GLG Partners.
Seeing as EnerSys (NYSE:ENS) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of money managers that slashed their entire stakes last quarter. Intriguingly, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors sold off the biggest stake of the 700 funds followed by Insider Monkey, worth about $3.2 million in stock, and Matthew Tewksbury’s Stevens Capital Management was right behind this move, as the fund cut about $0.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to EnerSys (NYSE:ENS). These stocks are First Hawaiian, Inc. (NASDAQ:FHB), Healthcare Realty Trust Inc (NYSE:HR), Investors Bancorp, Inc. (NASDAQ:ISBC), and NuVasive, Inc. (NASDAQ:NUVA). All of these stocks’ market caps resemble ENS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FHB | 28 | 476509 | 8 |
| HR | 4 | 15302 | -4 |
| ISBC | 33 | 777417 | 6 |
| NUVA | 22 | 349724 | -1 |
| Average | 21.75 | 404738 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $405 million. That figure was $150 million in ENS’s case. Investors Bancorp, Inc. (NASDAQ:ISBC) is the most popular stock in this table. On the other hand Healthcare Realty Trust Inc (NYSE:HR) is the least popular one with only 4 bullish hedge fund positions. EnerSys (NYSE:ENS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ISBC might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
