Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Enbridge Inc (NYSE:ENB), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is ENB stock a buy? Enbridge Inc (NYSE:ENB) investors should be aware of an increase in enthusiasm from smart money recently. Enbridge Inc (NYSE:ENB) was in 28 hedge funds’ portfolios at the end of December. The all time high for this statistic is 28. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ENB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
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Do Hedge Funds Think ENB Is A Good Stock To Buy Now?
At Q4’s end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 12% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in ENB 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.
Among these funds, Marshall Wace LLP held the most valuable stake in Enbridge Inc (NYSE:ENB), which was worth $44.5 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $32.1 million worth of shares. Schonfeld Strategic Advisors, Galibier Capital Management, and Renaissance Technologies 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 NewGen Asset Management allocated the biggest weight to Enbridge Inc (NYSE:ENB), around 5.36% of its 13F portfolio. Heronetta Management is also relatively very bullish on the stock, earmarking 5.06 percent of its 13F equity portfolio to ENB.
Consequently, key money managers were leading the bulls’ herd. Fairholme (FAIRX), managed by Bruce Berkowitz, created the biggest position in Enbridge Inc (NYSE:ENB). Fairholme (FAIRX) had $8.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $5.1 million position during the quarter. The other funds with brand new ENB positions are Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, David Dattels’s NewGen Asset Management, and Parvinder Thiara’s Athanor Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Enbridge Inc (NYSE:ENB). These stocks are Intercontinental Exchange Inc (NYSE:ICE), Truist Financial Corporation (NYSE:TFC), Illinois Tool Works Inc. (NYSE:ITW), Global Payments Inc (NYSE:GPN), Equinix Inc (NASDAQ:EQIX), PNC Financial Services Group Inc. (NYSE:PNC), and Brookfield Asset Management Inc. (NYSE:BAM). This group of stocks’ market caps are similar to ENB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICE | 53 | 3273294 | -11 |
| TFC | 40 | 526377 | 11 |
| ITW | 40 | 704116 | 1 |
| GPN | 55 | 5554643 | -2 |
| EQIX | 42 | 2001101 | 0 |
| PNC | 35 | 188415 | -2 |
| BAM | 38 | 1330514 | 3 |
| Average | 43.3 | 1939780 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.3 hedge funds with bullish positions and the average amount invested in these stocks was $1940 million. That figure was $181 million in ENB’s case. Global Payments Inc (NYSE:GPN) is the most popular stock in this table. On the other hand PNC Financial Services Group Inc. (NYSE:PNC) is the least popular one with only 35 bullish hedge fund positions. Compared to these stocks Enbridge Inc (NYSE:ENB) is even less popular than PNC. Our overall hedge fund sentiment score for ENB is 38. 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. Hedge funds clearly dropped the ball on ENB as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on ENB as the stock returned 19% since Q4 (through April 19th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
