Here Is What Hedge Funds Think About Sensata Technologies Holding N.V. (ST)

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is Sensata Technologies Holding N.V. (NYSE:ST) worth your attention right now? The smart money is turning less bullish. The number of long hedge fund bets dropped by 1 lately. At the end of this article we will also compare ST to other stocks including Macquarie Infrastructure Company LLC (NYSE:MIC), United Rentals, Inc. (NYSE:URI), and STERIS Corp (NYSE:STE) to get a better sense of its popularity.

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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Now, we’re going to take a glance at the new action regarding Sensata Technologies Holding N.V. (NYSE:ST).

What have hedge funds been doing with Sensata Technologies Holding N.V. (NYSE:ST)?

Heading into the fourth quarter of 2016, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Generation Investment Management, managed by David Blood and Al Gore, holds the most valuable position in Sensata Technologies Holding N.V. (NYSE:ST). Generation Investment Management has a $219.7 million position in the stock, comprising 2.4% of its 13F portfolio. Coming in second is Cantillon Capital Management, managed by William von Mueffling, which holds a $208.8 million position; the fund has 3% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions include John Griffin’s Blue Ridge Capital, Sharlyn C. Heslam’s Stockbridge Partners and William Crowley, William Harker, and Stephen Blass’s Ashe Capital.

Judging by the fact that Sensata Technologies Holding N.V. (NYSE:ST) has faced a decline in interest from the smart money, we can see that there is a sect of hedge funds that decided to sell off their entire stakes in the third quarter. It’s worth mentioning that Christopher Lord’s Criterion Capital dropped the biggest position of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $29.4 million in stock. Will Cook’s fund, Sunriver Management, also sold off its stock, about $18.7 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Sensata Technologies Holding N.V. (NYSE:ST). We will take a look at Macquarie Infrastructure Company LLC (NYSE:MIC), United Rentals, Inc. (NYSE:URI), STERIS Corp (NYSE:STE), and Michaels Companies Inc (NASDAQ:MIK). All of these stocks’ market caps resemble ST’s market cap.

As you can see these stocks had an average of 33.25 hedge funds with bullish positions and the average amount invested in these stocks was $684 million. That figure was $1393 million in ST’s case. Macquarie Infrastructure Company LLC (NYSE:MIC) is the most popular stock in this table. On the other hand STERIS Corp (NYSE:STE) is the least popular one with only 22 bullish hedge fund positions. Sensata Technologies Holding N.V. (NYSE:ST) 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 MIC might be a better candidate to consider a long position.

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Disclosure: None