We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Hill International Inc (NYSE:HIL).
Hill International Inc (NYSE:HIL) was in 12 hedge funds’ portfolios at the end of September. HIL investors should be aware of an increase in enthusiasm from smart money lately. There were 10 hedge funds in our database with HIL positions at the end of the previous quarter. Our calculations also showed that HIL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are seen as worthless, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading today, Our experts hone in on the bigwigs of this group, approximately 750 funds. Most estimates calculate that this group of people handle the lion’s share of the smart money’s total asset base, and by keeping an eye on their top investments, Insider Monkey has determined many investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Arnaud Ajdler of Engine Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the recent hedge fund action regarding Hill International Inc (NYSE:HIL).
Hedge fund activity in Hill International Inc (NYSE:HIL)
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2019. On the other hand, there were a total of 3 hedge funds with a bullish position in HIL a year ago. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, Engine Capital held the most valuable stake in Hill International Inc (NYSE:HIL), which was worth $18.4 million at the end of the third quarter. On the second spot was Ancora Advisors which amassed $13.6 million worth of shares. Solas Capital Management, Rutabaga Capital Management, and Bulldog Investors 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 Engine Capital allocated the biggest weight to Hill International Inc (NYSE:HIL), around 8.6% of its 13F portfolio. Solas Capital Management is also relatively very bullish on the stock, designating 5.47 percent of its 13F equity portfolio to HIL.
As industrywide interest jumped, some big names were leading the bulls’ herd. ExodusPoint Capital, managed by Michael Gelband, assembled the biggest position in Hill International Inc (NYSE:HIL). ExodusPoint Capital had $0.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0 million position during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Hill International Inc (NYSE:HIL) but similarly valued. We will take a look at SandRidge Energy Inc. (NYSE:SD), Pingtan Marine Enterprise Ltd. (NASDAQ:PME), IMPAC Mortgage Holdings, Inc (NYSE:IMH), and Constellation Pharmaceuticals, Inc. (NASDAQ:CNST). This group of stocks’ market values match HIL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SD | 18 | 53114 | 0 |
| PME | 2 | 54 | 1 |
| IMH | 5 | 1546 | 1 |
| CNST | 8 | 27123 | 0 |
| Average | 8.25 | 20459 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $49 million in HIL’s case. SandRidge Energy Inc. (NYSE:SD) is the most popular stock in this table. On the other hand Pingtan Marine Enterprise Ltd. (NASDAQ:PME) is the least popular one with only 2 bullish hedge fund positions. Hill International Inc (NYSE:HIL) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HIL wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HIL were disappointed as the stock returned 5.7% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
