Is Energizer Holdings, Inc. (ENR) a Good Stock to Buy?

Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.

Is Energizer Holdings, Inc. (NYSE:ENR) a good stock to buy now? It looks like hedge funds are becoming less hopeful. Between July and September, the number of funds followed by Insider Monkey bullish on the stock went down by four to 20. At the end of this article we will also compare ENR to other stocks including Integra Lifesciences Holdings Corp (NASDAQ:IART), United States Cellular Corporation (NYSE:USM), and B&G Foods, Inc. (NYSE:BGS) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, let’s take a gander at the recent action regarding Energizer Holdings, Inc. (NYSE:ENR).

What have hedge funds been doing with Energizer Holdings, Inc. (NYSE:ENR)?

At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in Energizer Holdings, Inc. (NYSE:ENR), which represents a decline of 17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ENR over the last five quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, GAMCO Investors, led by Mario Gabelli, holds the largest position in Energizer Holdings, Inc. (NYSE:ENR). GAMCO Investors has a $69.9 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson’s Adage Capital Management, which disclosed a $49.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Dmitry Balyasny’s Balyasny Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Since Energizer Holdings, Inc. (NYSE:ENR) has weathered declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of money managers that elected to cut their positions entirely in the third quarter. Intriguingly, Ram Seshan Venkateswaran’s Vernier Capital sold off the biggest position of all the hedgies studied by Insider Monkey, comprising an estimated $16.5 million in stock, and Glenn Russell Dubin’s Highbridge Capital Management was right behind this move, as the fund cut about $8.2 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks similar to Energizer Holdings, Inc. (NYSE:ENR). These stocks are Integra Lifesciences Holdings Corp (NASDAQ:IART), United States Cellular Corporation (NYSE:USM), B&G Foods, Inc. (NYSE:BGS), and PS Business Parks Inc (NYSE:PSB). All of these stocks’ market caps are closest to ENR’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $274 million in ENR’s case. Integra Lifesciences Holdings Corp (NASDAQ:IART) is the most popular stock in this table. On the other hand PS Business Parks Inc (NYSE:PSB) is the least popular one with only seven funds holding shares. Compared to these stocks Energizer Holdings, Inc. (NYSE:ENR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: none