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 EnerSys (NYSE:ENS).
EnerSys (NYSE:ENS) shareholders have witnessed an increase in enthusiasm from smart money recently. Our calculations also showed that ENS 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.
In the 21st century investor’s toolkit there are several metrics stock market investors have at their disposal to analyze their holdings. A duo of the most under-the-radar metrics are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can trounce their index-focused peers by a healthy margin (see the details here).
Paul Tudor Jones of Tudor Investment Corp
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 check out the recent hedge fund action encompassing EnerSys (NYSE:ENS).
How have hedgies been trading EnerSys (NYSE:ENS)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in ENS a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Richard S. Meisenberg’s ACK Asset Management has the biggest position in EnerSys (NYSE:ENS), worth close to $28 million, corresponding to 7.9% of its total 13F portfolio. On ACK Asset Management’s heels is Royce & Associates, managed by Chuck Royce, which holds a $19 million position; 0.2% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Israel Englander’s Millennium Management, Charles Paquelet’s Skylands Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position ACK Asset Management allocated the biggest weight to EnerSys (NYSE:ENS), around 7.87% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, dishing out 1.2 percent of its 13F equity portfolio to ENS.
As industrywide interest jumped, specific money managers have jumped into EnerSys (NYSE:ENS) headfirst. Renaissance Technologies, created the biggest position in EnerSys (NYSE:ENS). Renaissance Technologies had $5.4 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as EnerSys (NYSE:ENS) but similarly valued. We will take a look at American Assets Trust, Inc (NYSE:AAT), Quaker Chemical Corp (NYSE:KWR), Navistar International Corp (NYSE:NAV), and Iridium Communications Inc. (NASDAQ:IRDM). This group of stocks’ market valuations match ENS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AAT | 11 | 36996 | -4 |
| KWR | 18 | 154202 | 5 |
| NAV | 23 | 1132856 | -3 |
| IRDM | 16 | 138343 | 4 |
| Average | 17 | 365599 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $366 million. That figure was $91 million in ENS’s case. Navistar International Corp (NYSE:NAV) is the most popular stock in this table. On the other hand American Assets Trust, Inc (NYSE:AAT) is the least popular one with only 11 bullish hedge fund positions. EnerSys (NYSE:ENS) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on ENS, though not to the same extent, as the stock returned 6.4% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
