Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the second quarter. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds’ top consensus picks. This year hedge funds’ top 20 stock picks outperformed the S&P 500 Index by 6.6 percentage points through May 30th. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Is JELD-WEN Holding, Inc. (NYSE:JELD) an outstanding investment now? Money managers are getting more bullish. The number of long hedge fund bets increased by 5 recently. Our calculations also showed that jeld isn’t among the 30 most popular stocks among hedge funds. JELD was in 21 hedge funds’ portfolios at the end of March. There were 16 hedge funds in our database with JELD holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a look at the recent hedge fund action regarding JELD-WEN Holding, Inc. (NYSE:JELD).
How have hedgies been trading JELD-WEN Holding, Inc. (NYSE:JELD)?
At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in JELD a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in JELD-WEN Holding, Inc. (NYSE:JELD) was held by Pzena Investment Management, which reported holding $135.6 million worth of stock at the end of March. It was followed by Hound Partners with a $103.3 million position. Other investors bullish on the company included Southpoint Capital Advisors, Raging Capital Management, and Millennium Management.
As aggregate interest increased, key money managers have jumped into JELD-WEN Holding, Inc. (NYSE:JELD) headfirst. Millennium Management, managed by Israel Englander, established the largest position in JELD-WEN Holding, Inc. (NYSE:JELD). Millennium Management had $7.5 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also initiated a $4.6 million position during the quarter. The other funds with new positions in the stock are Brandon Osten’s Venator Capital Management, Jim Simons’s Renaissance Technologies, and Mike Vranos’s Ellington.
Let’s now take a look at hedge fund activity in other stocks similar to JELD-WEN Holding, Inc. (NYSE:JELD). We will take a look at Solaredge Technologies Inc (NASDAQ:SEDG), Crescent Point Energy Corp (NYSE:CPG), MaxLinear, Inc. (NYSE:MXL), and Mueller Industries, Inc. (NYSE:MLI). All of these stocks’ market caps are closest to JELD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SEDG | 22 | 115277 | 8 |
| CPG | 17 | 72343 | 1 |
| MXL | 6 | 33874 | 1 |
| MLI | 13 | 184965 | 3 |
| Average | 14.5 | 101615 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $328 million in JELD’s case. Solaredge Technologies Inc (NASDAQ:SEDG) is the most popular stock in this table. On the other hand MaxLinear, Inc. (NYSE:MXL) is the least popular one with only 6 bullish hedge fund positions. JELD-WEN Holding, Inc. (NYSE:JELD) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on JELD as the stock returned 8.2% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
