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. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Eaton Vance Corp (NYSE:EV) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Eaton Vance Corp (NYSE:EV) was in 9 hedge funds’ portfolios at the end of September. EV investors should be aware of a decrease in enthusiasm from smart money lately. There were 10 hedge funds in our database with EV positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as CONSOL Energy Inc. (NYSE:CNX), CSRA Inc (MYSE:CSRA), and Brunswick Corporation (NYSE:BC) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, we’re going to go over the fresh action surrounding Eaton Vance Corp (NYSE:EV).
How are hedge funds trading Eaton Vance Corp (NYSE:EV)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in EV heading into this year. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, AQR Capital Management, led by Cliff Asness, holds the number one position in Eaton Vance Corp (NYSE:EV). AQR Capital Management has a $5.9 million position in the stock, comprising less than 0.1% of its 13F portfolio. Coming in second is Millennium Management, one of the 10 largest hedge funds in the world with a $3.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise John A. Levin’s Levin Capital Strategies, Roger Ibbotson’s Zebra Capital Management and Clinton Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Since Eaton Vance Corp (NYSE:EV) has encountered falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few fund managers who were dropping their positions entirely heading into Q4. It’s worth mentioning that James Parsons’s Junto Capital Management said goodbye to the largest investment of the “upper crust” of funds studied by Insider Monkey, comprising close to $18.2 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its call options, about $0.6 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Eaton Vance Corp (NYSE:EV) but similarly valued. These stocks are CONSOL Energy Inc. (NYSE:CNX), CSRA Inc (MYSE:CSRA), Brunswick Corporation (NYSE:BC), and Equity One, Inc. (NYSE:EQY). This group of stocks’ market caps match EV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNX | 38 | 1774058 | 4 |
| CSRA | 25 | 524486 | -2 |
| BC | 30 | 500919 | -1 |
| EQY | 10 | 92783 | -8 |
As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $723 million. That figure was $15 million in EV’s case. CONSOL Energy Inc. (NYSE:CNX) is the most popular stock in this table. On the other hand Equity One, Inc. (NYSE:EQY) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Eaton Vance Corp (NYSE:EV) is even less popular than EQY. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
