The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Enstar Group Ltd. (NASDAQ:ESGR).
Enstar Group Ltd. (NASDAQ:ESGR) has experienced a decrease in hedge fund sentiment of late. There were 13 hedge funds in our database with ESGR positions at the end of September. At the end of this article we will also compare ESGR to other stocks including Juno Therapeutics Inc (NASDAQ:JUNO), Embraer SA (ADR) (NYSE:ERJ), and PDC Energy Inc (NASDAQ:PDCE) to get a better sense of its popularity.
Follow Enstar Group Ltd (NASDAQ:ESGR)
Follow Enstar Group Ltd (NASDAQ:ESGR)
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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How are hedge funds trading Enstar Group Ltd. (NASDAQ:ESGR)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decrease of 7% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards ESGR over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Charles Akre of Akre Capital Management holds the largest position in Enstar Group Ltd. (NASDAQ:ESGR). Akre Capital Management has a $238.5 million position in the stock, comprising 4.6% of its 13F portfolio. Coming in second is D.T. Ignacio Jayanti’s Corsair Capital LLC which holds a $118.2 million position; 53.8% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish encompass Lei Zhang’s Hillhouse Capital Management, Ric Dillon’s Diamond Hill Capital, and Renaissance Technologies which is one of the largest hedge funds in the world. 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 Enstar Group Ltd. (NASDAQ:ESGR) has sustained falling interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers that elected to cut their entire stakes in the third quarter. At the top of the heap, Paul Tudor Jones’ Tudor Investment Corp got rid of the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling about $0.5 million in stock. George Hall’s fund, Clinton Group, also sold off its stock, about $0.4 million worth.
Let’s check out hedge fund activity in other stocks similar to Enstar Group Ltd. (NASDAQ:ESGR). We will take a look at Juno Therapeutics Inc (NASDAQ:JUNO), Embraer SA (ADR) (NYSE:ERJ), PDC Energy Inc (NASDAQ:PDCE), and Piedmont Office Realty Trust, Inc. (NYSE:PDM). This group of stocks’ market valuations match ESGR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JUNO | 16 | 82556 | 5 |
| ERJ | 11 | 47041 | 1 |
| PDCE | 22 | 278279 | 5 |
| PDM | 10 | 211041 | 0 |
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $485 million in ESGR’s case. PDC Energy Inc (NASDAQ:PDCE) is the most popular stock in this table. On the other hand Piedmont Office Realty Trust, Inc. (NYSE:PDM) is the least popular one with only 10 bullish hedge fund positions. Enstar Group Ltd. (NASDAQ:ESGR) 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 PDCE might be a better candidate to consider taking a long position in.
Disclosure: None
