Is ENTG Stock A Buy or Sell?

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 Entegris Inc (NASDAQ:ENTG), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is ENTG stock a buy or sell? Entegris Inc (NASDAQ:ENTG) has seen an increase in activity from the world’s largest hedge funds lately. Entegris Inc (NASDAQ:ENTG) was in 30 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ENTG 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).

William Von Mueffling of Cantillon Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to take a look at the key hedge fund action regarding Entegris Inc (NASDAQ:ENTG).

Do Hedge Funds Think ENTG Is A Good Stock To Buy Now?

At fourth quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ENTG over the last 22 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

The largest stake in Entegris Inc (NASDAQ:ENTG) was held by Select Equity Group, which reported holding $613.7 million worth of stock at the end of December. It was followed by Cantillon Capital Management with a $250.8 million position. Other investors bullish on the company included RGM Capital, Iridian Asset Management, and Gates Capital Management. In terms of the portfolio weights assigned to each position RGM Capital allocated the biggest weight to Entegris Inc (NASDAQ:ENTG), around 3.74% of its 13F portfolio. Sandler Capital Management is also relatively very bullish on the stock, dishing out 3.54 percent of its 13F equity portfolio to ENTG.

As industrywide interest jumped, key money managers were leading the bulls’ herd. ExodusPoint Capital, managed by Michael Gelband, created the largest position in Entegris Inc (NASDAQ:ENTG). ExodusPoint Capital had $7.6 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $5.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Eisner’s Engineers Gate Manager, Jinghua Yan’s TwinBeech Capital, and Qing Li’s Sciencast Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Entegris Inc (NASDAQ:ENTG) but similarly valued. We will take a look at Avery Dennison Corporation (NYSE:AVY), Sociedad Quimica y Minera (NYSE:SQM), Huntington Bancshares Incorporated (NASDAQ:HBAN), Guardant Health, Inc. (NASDAQ:GH), Alliant Energy Corporation (NYSE:LNT), Erie Indemnity Company (NASDAQ:ERIE), and Hasbro, Inc. (NASDAQ:HAS). This group of stocks’ market caps are similar to ENTG’s market cap.

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As you can see these stocks had an average of 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $398 million. That figure was $1229 million in ENTG’s case. Guardant Health, Inc. (NASDAQ:GH) is the most popular stock in this table. On the other hand Erie Indemnity Company (NASDAQ:ERIE) is the least popular one with only 7 bullish hedge fund positions. Entegris Inc (NASDAQ:ENTG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ENTG is 65.6. 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. 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 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on ENTG as the stock returned 24.6% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.

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