Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Era Group Inc (NYSE:ERA) undervalued? Prominent investors are altogether reducing their bets on the stock. The number of long hedge fund bets that are revealed through the 13F filings retreated by 2 lately. In this way, there were 7 hedge funds in our database with ERA positions at the end of the third quarter. At the end of this article we will also compare ERA to other stocks including Century Casinos, Inc. (NASDAQ:CNTY), Mediwound Ltd (NASDAQ:MDWD), and PFSweb, Inc. (NASDAQ:PFSW) to get a better sense of its popularity.
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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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How have hedgies been trading Era Group Inc (NYSE:ERA)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ERA over the last 5 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Richard Mashaal’s Rima Senvest Management has the most valuable position in Era Group Inc (NYSE:ERA), worth close to $12.8 million. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $9.8 million position. Some other hedge funds and institutional investors that are bullish include Paul Orlin and Alex Porter’s Amici Capital, D. E. Shaw’s D E Shaw, one of the biggest hedge funds in the world, and John Overdeck and David Siegel’s Two Sigma Advisors. 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.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually got rid of their positions entirely. At the top of the heap, Jim Simons’ Renaissance Technologies got rid of the largest stake of the “upper crust” of funds studied by Insider Monkey, totaling about $0.2 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also said goodbye to its stock, about $0.1 million worth.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Era Group Inc (NYSE:ERA) but similarly valued. We will take a look at Century Casinos, Inc. (NASDAQ:CNTY), Mediwound Ltd (NASDAQ:MDWD), PFSweb, Inc. (NASDAQ:PFSW), and Jamba, Inc. (NASDAQ:JMBA). This group of stocks’ market valuations are similar to ERA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNTY | 6 | 36231 | 0 |
| MDWD | 5 | 7250 | 0 |
| PFSW | 10 | 13557 | -2 |
| JMBA | 7 | 56461 | -1 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $26 million in ERA’s case. PFSweb, Inc. (NASDAQ:PFSW) is the most popular stock in this table. On the other hand Mediwound Ltd (NASDAQ:MDWD) is the least popular one with only 5 bullish hedge fund positions. Era Group Inc (NYSE:ERA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PFSW might be a better candidate to consider taking a long position in.
Disclosure: None
