Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by nearly 10 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Herc Holdings Inc. (NYSE:HRI) and compare it against similarly valued stocks such as Getty Realty Corp. (NYSE:GTY), Synaptics Incorporated (NASDAQ:SYNA), Golar LNG Limited (NASDAQ:GLNG), and BELLUS Health Inc. (NASDAQ:BLU).
Herc Holdings Inc. (NYSE:HRI) has experienced an increase in hedge fund sentiment lately. HRI was in 26 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with HRI positions at the end of the previous quarter. Our calculations also showed that HRI 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.
In today’s marketplace there are plenty of signals investors put to use to grade stocks. Two of the most underrated signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the top fund managers can outclass their index-focused peers by a significant margin (see the details here).
Mario Gabelli of GAMCO Investors
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a peek at the new hedge fund action surrounding Herc Holdings Inc. (NYSE:HRI).
Hedge fund activity in Herc Holdings Inc. (NYSE:HRI)
Heading into the fourth quarter of 2019, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in HRI over the last 17 quarters. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Icahn Capital, managed by Carl Icahn, holds the biggest position in Herc Holdings Inc. (NYSE:HRI). Icahn Capital has a $209.1 million position in the stock, comprising 0.8% of its 13F portfolio. On Icahn Capital’s heels is Mario Gabelli of GAMCO Investors, with a $167.1 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Jared Nussbaum’s Nut Tree Capital, Renaissance Technologies and Chuck Royce’s Royce & Associates. In terms of the portfolio weights assigned to each position Nut Tree Capital allocated the biggest weight to Herc Holdings Inc. (NYSE:HRI), around 10.69% of its portfolio. ACK Asset Management is also relatively very bullish on the stock, earmarking 3.52 percent of its 13F equity portfolio to HRI.
As one would reasonably expect, key money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, established the most outsized position in Herc Holdings Inc. (NYSE:HRI). Driehaus Capital had $9.3 million invested in the company at the end of the quarter. Mark Coe’s Intrinsic Edge Capital also initiated a $8.1 million position during the quarter. The other funds with new positions in the stock are Ken Grossman and Glen Schneider’s SG Capital Management, Minhua Zhang’s Weld Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Herc Holdings Inc. (NYSE:HRI) but similarly valued. We will take a look at Getty Realty Corp. (NYSE:GTY), Synaptics Incorporated (NASDAQ:SYNA), Golar LNG Limited (NASDAQ:GLNG), and BELLUS Health Inc. (NASDAQ:BLU). This group of stocks’ market values are closest to HRI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GTY | 9 | 92245 | -1 |
| SYNA | 19 | 266720 | 6 |
| GLNG | 24 | 249259 | 1 |
| BLU | 13 | 82956 | 13 |
| Average | 16.25 | 172795 | 4.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $173 million. That figure was $566 million in HRI’s case. Golar LNG Limited (NASDAQ:GLNG) is the most popular stock in this table. On the other hand Getty Realty Corp. (NYSE:GTY) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Herc Holdings Inc. (NYSE:HRI) is more popular among hedge funds. 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. Unfortunately HRI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HRI were disappointed as the stock returned 0.5% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
