Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Spire Inc. (NYSE:SR) based on that data and determine whether they were really smart about the stock.
Spire Inc. (NYSE:SR) shareholders have witnessed an increase in enthusiasm from smart money in recent months. Spire Inc. (NYSE:SR) was in 18 hedge funds’ portfolios at the end of June. The all time high for this statistics is 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a large number of methods shareholders can use to size up publicly traded companies. A duo of the most innovative methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outperform their index-focused peers by a very impressive margin (see the details here).
Steven Cohen of Point72 Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind let’s take a peek at the fresh hedge fund action regarding Spire Inc. (NYSE:SR).
How have hedgies been trading Spire Inc. (NYSE:SR)?
At the end of June, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in SR over the last 20 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
The largest stake in Spire Inc. (NYSE:SR) was held by Millennium Management, which reported holding $10.5 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $7.6 million position. Other investors bullish on the company included GLG Partners, Citadel Investment Group, and Tudor Investment Corp. In terms of the portfolio weights assigned to each position Quantamental Technologies allocated the biggest weight to Spire Inc. (NYSE:SR), around 0.18% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, designating 0.11 percent of its 13F equity portfolio to SR.
As aggregate interest increased, some big names have been driving this bullishness. GLG Partners, managed by Noam Gottesman, assembled the most valuable position in Spire Inc. (NYSE:SR). GLG Partners had $6.1 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Donald Sussman’s Paloma Partners, and Greg Eisner’s Engineers Gate Manager.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Spire Inc. (NYSE:SR) but similarly valued. These stocks are Glacier Bancorp, Inc. (NASDAQ:GBCI), Iridium Communications Inc. (NASDAQ:IRDM), World Wrestling Entertainment, Inc. (NYSE:WWE), W.R. Grace & Co. (NYSE:GRA), Nextera Energy Partners LP (NYSE:NEP), Envista Holdings Corporation (NYSE:NVST), and RBC Bearings Incorporated (NASDAQ:ROLL). This group of stocks’ market caps match SR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GBCI | 20 | 61522 | 8 |
| IRDM | 19 | 223663 | -1 |
| WWE | 29 | 390419 | -2 |
| GRA | 39 | 1296937 | 4 |
| NEP | 21 | 125356 | 0 |
| NVST | 21 | 395641 | -1 |
| ROLL | 17 | 61588 | 8 |
| Average | 23.7 | 365018 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.7 hedge funds with bullish positions and the average amount invested in these stocks was $365 million. That figure was $40 million in SR’s case. W.R. Grace & Co. (NYSE:GRA) is the most popular stock in this table. On the other hand RBC Bearings Incorporated (NASDAQ:ROLL) is the least popular one with only 17 bullish hedge fund positions. Spire Inc. (NYSE:SR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SR is 42.3. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and surpassed the market by 19.3 percentage points. Unfortunately SR wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); SR investors were disappointed as the stock returned -18.1% in the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
