We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 835 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about JELD-WEN Holding, Inc. (NYSE:JELD) in this article.
Is JELD-WEN Holding, Inc. (NYSE:JELD) the right investment to pursue these days? Money managers are turning bullish. The number of long hedge fund positions advanced by 15 lately. Our calculations also showed that JELD isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings). JELD was in 29 hedge funds’ portfolios at the end of the fourth quarter of 2019. There were 14 hedge funds in our database with JELD holdings at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 41 percentage points since March 2017 (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 35.3% through March 3rd. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
With all of this in mind let’s check out the recent hedge fund action surrounding JELD-WEN Holding, Inc. (NYSE:JELD).
What does smart money think about JELD-WEN Holding, Inc. (NYSE:JELD)?
At Q4’s end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 107% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JELD over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Pzena Investment Management was the largest shareholder of JELD-WEN Holding, Inc. (NYSE:JELD), with a stake worth $186.7 million reported as of the end of September. Trailing Pzena Investment Management was Arrowstreet Capital, which amassed a stake valued at $22.6 million. Hound Partners, SG Capital Management, and Renaissance Technologies 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 Venator Capital Management allocated the biggest weight to JELD-WEN Holding, Inc. (NYSE:JELD), around 3.54% of its 13F portfolio. SG Capital Management is also relatively very bullish on the stock, designating 3.18 percent of its 13F equity portfolio to JELD.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. SG Capital Management, managed by Ken Grossman and Glen Schneider, established the most outsized position in JELD-WEN Holding, Inc. (NYSE:JELD). SG Capital Management had $16.1 million invested in the company at the end of the quarter. Mark Coe’s Intrinsic Edge Capital also made a $14.8 million investment in the stock during the quarter. The other funds with brand new JELD positions are Israel Englander’s Millennium Management, Ed Bosek’s BeaconLight Capital, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as JELD-WEN Holding, Inc. (NYSE:JELD) but similarly valued. We will take a look at Alamos Gold Inc (NYSE:AGI), Aurora Cannabis Inc. (NYSE:ACB), Washington Real Estate Investment Trust (NYSE:WRE), and Tenable Holdings, Inc. (NASDAQ:TENB). This group of stocks’ market caps match JELD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGI | 16 | 240507 | 0 |
| ACB | 12 | 19142 | 1 |
| WRE | 9 | 128480 | 4 |
| TENB | 22 | 210963 | 3 |
| Average | 14.75 | 149773 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $150 million. That figure was $333 million in JELD’s case. Tenable Holdings, Inc. (NASDAQ:TENB) is the most popular stock in this table. On the other hand Washington Real Estate Investment Trust (NYSE:WRE) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks JELD-WEN Holding, Inc. (NYSE:JELD) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 13.0% in 2020 through April 6th and still beat the market by 4.2 percentage points. Unfortunately JELD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on JELD were disappointed as the stock returned -60.7% during the three months of 2020 (through April 6th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
