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. Insider Monkey finished processing more than 750 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2019. In this article we are going to take a look at smart money sentiment towards Envela Corporation (NYSE:DGSE).
Envela Corporation (NYSE:DGSE) investors should pay attention to an increase in support from the world’s most elite money managers of late. Our calculations also showed that DGSE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to check out the key hedge fund action encompassing Envela Corporation (NYSE:DGSE).
Hedge fund activity in Envela Corporation (NYSE:DGSE)
Heading into the fourth quarter of 2019, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 200% from the second quarter of 2019. By comparison, 2 hedge funds held shares or bullish call options in DGSE a year ago. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Envela Corporation (NYSE:DGSE), with a stake worth $0.2 million reported as of the end of September. Trailing Renaissance Technologies was SG Capital Management, which amassed a stake valued at $0.1 million. Citadel Investment Group was 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 SG Capital Management allocated the biggest weight to Envela Corporation (NYSE:DGSE), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0001 percent of its 13F equity portfolio to DGSE.
As one would reasonably expect, some big names have jumped into Envela Corporation (NYSE:DGSE) headfirst. SG Capital Management, managed by Ken Grossman and Glen Schneider, assembled the largest position in Envela Corporation (NYSE:DGSE). SG Capital Management had $0.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter.
Let’s now review hedge fund activity in other stocks similar to Envela Corporation (NYSE:DGSE). We will take a look at Acer Therapeutics Inc. (NASDAQ:ACER), Celldex Therapeutics, Inc. (NASDAQ:CLDX), General Moly, Inc. (NYSE:GMO), and WVS Financial Corp. (NASDAQ:WVFC). This group of stocks’ market caps are similar to DGSE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACER | 4 | 3342 | 2 |
| CLDX | 4 | 2337 | 1 |
| GMO | 1 | 80 | 0 |
| WVFC | 1 | 1828 | 0 |
| Average | 2.5 | 1897 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.5 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $0 million in DGSE’s case. Acer Therapeutics Inc. (NASDAQ:ACER) is the most popular stock in this table. On the other hand General Moly, Inc. (NYSE:GMO) is the least popular one with only 1 bullish hedge fund positions. Envela Corporation (NYSE:DGSE) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on DGSE as the stock returned 16.7% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.