Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.
In this article, we’ll see whether EnPro Industries, Inc. (NYSE:NPO) represents a good investment based on the latest hedge fund activity surrounding the stock. Overall, the company registered a decline in popularity among investors in our database last quarter and 12 funds held shares of NPO at the end of September. At the end of this article we will also compare NPO to other stocks including Innoviva Inc (NASDAQ:INVA), Kearny Financial Corp. (NASDAQ:KRNY), and Ameris Bancorp (NASDAQ:ABCB) to get a better sense of its popularity.
Follow Enpro Inc. (NYSE:NPO)
Follow Enpro Inc. (NYSE:NPO)
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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With all of this in mind, let’s check out the new action surrounding EnPro Industries, Inc. (NYSE:NPO).
How have hedgies been trading EnPro Industries, Inc. (NYSE:NPO)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, compared to 15 funds at the end of June. By comparison, 14 hedge funds held shares or bullish call options in NPO heading into this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Silver Point Capital, led by Edward A. Mule, holds the biggest position in EnPro Industries, Inc. (NYSE:NPO). Silver Point Capital has a $91.5 million position in the stock, comprising 13.7% of its 13F portfolio. Sitting at the No. 2 spot is Greywolf Capital Management, led by Jonathan Savitz, which holds a $45.3 million position; the fund has 9.5% of its 13F portfolio invested in the stock. Some other peers that are bullish include Mariko Gordon’s Daruma Asset Management, Thomas Ellis and Todd Hammer’s North Run Capital, and Steve Ketchum’s Sound Point Capital. 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.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. It’s worth mentioning that Bart Baum’s Ionic Capital Management said goodbye to the biggest stake of all the investors monitored by Insider Monkey, valued at close to $7.4 million in stock. Peter S. Park’s fund, Park West Asset Management, also dropped its stock, about $6.9 million worth.
Let’s check out hedge fund activity in other stocks similar to EnPro Industries, Inc. (NYSE:NPO). We will take a look at Innoviva Inc(NASDAQ:INVA), Kearny Financial Corp. (NASDAQ:KRNY), Ameris Bancorp (NASDAQ:ABCB), and Korn/Ferry International (NYSE:KFY). This group of stocks’ market caps are closest to NPO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INVA | 21 | 394753 | 1 |
| KRNY | 18 | 131292 | -1 |
| ABCB | 13 | 76924 | 1 |
| KFY | 9 | 92113 | -4 |
As you can see these stocks had an average of 15 funds with bullish positions and the average amount invested in these stocks was $174 million, versus $216 million in NPO’s case. Innoviva Inc (NASDAQ:INVA) is the most popular stock in this table. On the other hand Korn/Ferry International (NYSE:KFY) is the least popular one with only nine funds holding shares. EnPro Industries, Inc. (NYSE:NPO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard INVA might be a better candidate to consider taking a long position in.
Disclosure: none
