Here is What Hedge Funds Think About Express, Inc. (EXPR)

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Express, Inc. (NYSE:EXPR) changed recently.

Express, Inc. (NYSE:EXPR) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 34. EXPR has seen an increase in support from the world’s most elite money managers in recent months. There were 12 hedge funds in our database with EXPR holdings at the end of March. Our calculations also showed that EXPR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Fred DiSanto of Ancora Advisors

Now let’s take a peek at the recent hedge fund action regarding Express, Inc. (NYSE:EXPR).

Do Hedge Funds Think EXPR Is A Good Stock To Buy Now?

At second quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 58% from the first quarter of 2020. By comparison, 13 hedge funds held shares or bullish call options in EXPR a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Among these funds, Contrarius Investment Management held the most valuable stake in Express, Inc. (NYSE:EXPR), which was worth $40.8 million at the end of the second quarter. On the second spot was D E Shaw which amassed $19.7 million worth of shares. Millennium Management, Renaissance Technologies, and Royce & Associates 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 Contrarius Investment Management allocated the biggest weight to Express, Inc. (NYSE:EXPR), around 1.99% of its 13F portfolio. Divisar Capital is also relatively very bullish on the stock, designating 0.27 percent of its 13F equity portfolio to EXPR.

As industrywide interest jumped, key money managers have jumped into Express, Inc. (NYSE:EXPR) headfirst. Royce & Associates, managed by Chuck Royce, established the biggest position in Express, Inc. (NYSE:EXPR). Royce & Associates had $6.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $5.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Brian J. Higgins’s King Street Capital, and Frederick DiSanto’s Ancora Advisors.

Let’s now take a look at hedge fund activity in other stocks similar to Express, Inc. (NYSE:EXPR). We will take a look at D8 Holdings Corp. (NYSE:DEH), Alta Equipment Group Inc. (NYSE:ALTG), Bar Harbor Bankshares (NYSE:BHB), Intrepid Potash, Inc. (NYSE:IPI), Motorcar Parts of America, Inc. (NASDAQ:MPAA), North American Construction Group Ltd. (NYSE:NOA), and HyreCar Inc. (NASDAQ:HYRE). This group of stocks’ market caps resemble EXPR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.9 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $109 million in EXPR’s case. D8 Holdings Corp. (NYSE:DEH) is the most popular stock in this table. On the other hand Bar Harbor Bankshares (NYSE:BHB) is the least popular one with only 4 bullish hedge fund positions. Express, Inc. (NYSE:EXPR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EXPR is 51. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately EXPR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EXPR were disappointed as the stock returned -36.1% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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