Is EnPro Industries, Inc. (NYSE:NPO) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the winners in the stock market.
EnPro Industries, Inc. (NYSE:NPO) investors should pay attention to a decrease in support from the world’s most elite money managers lately. NPO was in 15 hedge funds’ portfolios at the end of December. There were 16 hedge funds in our database with NPO holdings at the end of the previous quarter. Our calculations also showed that NPO isn’t among the 30 most popular stocks among hedge funds.
If you’d ask most stock holders, hedge funds are perceived as unimportant, old financial vehicles of years past. While there are over 8000 funds with their doors open at present, We look at the crème de la crème of this group, about 750 funds. These money managers direct bulk of the smart money’s total asset base, and by keeping an eye on their best equity investments, Insider Monkey has spotted a number of investment strategies that have historically surpassed the market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by nearly 5 percentage points per annum since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We’re going to take a look at the latest hedge fund action encompassing EnPro Industries, Inc. (NYSE:NPO).
How have hedgies been trading EnPro Industries, Inc. (NYSE:NPO)?
Heading into the first quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter of 2018. On the other hand, there were a total of 13 hedge funds with a bullish position in NPO a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, GAMCO Investors held the most valuable stake in EnPro Industries, Inc. (NYSE:NPO), which was worth $72.7 million at the end of the fourth quarter. On the second spot was Daruma Asset Management which amassed $22.6 million worth of shares. Moreover, Marshall Wace LLP, Millennium Management, and Citadel Investment Group were also bullish on EnPro Industries, Inc. (NYSE:NPO), allocating a large percentage of their portfolios to this stock.
Seeing as EnPro Industries, Inc. (NYSE:NPO) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedgies that elected to cut their entire stakes in the third quarter. Intriguingly, Ian Cumming and Joseph Steinberg’s Leucadia National dumped the biggest investment of the “upper crust” of funds watched by Insider Monkey, comprising about $1.3 million in stock. Brandon Haley’s fund, Holocene Advisors, also sold off its stock, about $0.8 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as EnPro Industries, Inc. (NYSE:NPO) but similarly valued. We will take a look at McGrath RentCorp (NASDAQ:MGRC), Silicon Motion Technology Corp. (NASDAQ:SIMO), Studio City International Holdings Limited (NYSE:MSC), and American Axle & Manufacturing Holdings, Inc. (NYSE:AXL). This group of stocks’ market valuations are closest to NPO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MGRC | 23 | 119085 | 1 |
| SIMO | 17 | 194652 | 1 |
| MSC | 5 | 196463 | 5 |
| AXL | 24 | 124082 | -1 |
| Average | 17.25 | 158571 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $118 million in NPO’s case. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Studio City International Holdings Limited (NYSE:MSC) is the least popular one with only 5 bullish hedge fund positions. EnPro Industries, Inc. (NYSE:NPO) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on NPO, though not to the same extent, as the stock returned 20.5% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
