How Did Hedge Funds’ nVent Electric plc (NVT) Bets Fare?

We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards nVent Electric plc (NYSE:NVT) and determine whether hedge funds skillfully traded this stock.

Is nVent Electric plc (NYSE:NVT) a good investment now? Hedge funds were becoming more confident. The number of bullish hedge fund positions improved by 4 in recent months. nVent Electric plc (NYSE:NVT) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 34. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NVT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a glance at the fresh hedge fund action encompassing nVent Electric plc (NYSE:NVT).

Peter Algert of Algert Global

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

At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in NVT over the last 25 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Among these funds, Ariel Investments held the most valuable stake in nVent Electric plc (NYSE:NVT), which was worth $133.1 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $72.5 million worth of shares. Lansdowne Partners, Interval Partners, and D E Shaw 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 Lansdowne Partners allocated the biggest weight to nVent Electric plc (NYSE:NVT), around 3.28% of its 13F portfolio. Greenhouse Funds is also relatively very bullish on the stock, earmarking 3.02 percent of its 13F equity portfolio to NVT.

Consequently, key hedge funds have been driving this bullishness. North Fourth Asset Management, managed by Anthony Joseph Vaccarino, assembled the largest position in nVent Electric plc (NYSE:NVT). North Fourth Asset Management had $4.5 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $4.5 million position during the quarter. The other funds with brand new NVT positions are Paul Tudor Jones’s Tudor Investment Corp, Alexander Mitchell’s Scopus Asset Management, and Peter Algert’s Algert Global.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as nVent Electric plc (NYSE:NVT) but similarly valued. We will take a look at LifeStance Health Group Inc. (NASDAQ:LFST), Altair Engineering Inc. (NASDAQ:ALTR), AMN Healthcare Services Inc (NYSE:AMN), Helen of Troy Limited (NASDAQ:HELE), Valley National Bancorp (NASDAQ:VLY), PacWest Bancorp (NASDAQ:PACW), and Ashland Global Holdings Inc. (NYSE:ASH). This group of stocks’ market valuations resemble NVT’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $415 million. That figure was $553 million in NVT’s case. PacWest Bancorp (NASDAQ:PACW) is the most popular stock in this table. On the other hand LifeStance Health Group Inc. (NASDAQ:LFST) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks nVent Electric plc (NYSE:NVT) is more popular among hedge funds. Our overall hedge fund sentiment score for NVT is 89. 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. 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 returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on NVT as the stock returned 8.1% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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