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 June. At Insider Monkey, we follow nearly 750 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 Hanger, Inc. (NYSE:HNGR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Hanger, Inc. (NYSE:HNGR) an outstanding investment today? Money managers are turning less bullish. The number of long hedge fund bets dropped by 2 in recent months. Our calculations also showed that HNGR 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
J. Carlo Cannell of Cannell Capital
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. We’re going to take a gander at the fresh hedge fund action regarding Hanger, Inc. (NYSE:HNGR).
Hedge fund activity in Hanger, Inc. (NYSE:HNGR)
Heading into the fourth quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -12% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HNGR over the last 17 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Hanger, Inc. (NYSE:HNGR) was held by SCW Capital Management, which reported holding $26.6 million worth of stock at the end of September. It was followed by Courage Capital with a $24.4 million position. Other investors bullish on the company included Cannell Capital, Renaissance Technologies, and Ariel Investments. In terms of the portfolio weights assigned to each position Courage Capital allocated the biggest weight to Hanger, Inc. (NYSE:HNGR), around 39.16% of its 13F portfolio. SCW Capital Management is also relatively very bullish on the stock, setting aside 22.87 percent of its 13F equity portfolio to HNGR.
Due to the fact that Hanger, Inc. (NYSE:HNGR) has witnessed a decline in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedgies that slashed their positions entirely by the end of the third quarter. It’s worth mentioning that Frederick DiSanto’s Ancora Advisors said goodbye to the largest investment of all the hedgies monitored by Insider Monkey, valued at about $10.8 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund sold off about $1.4 million worth. These moves are important to note, as aggregate hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Hanger, Inc. (NYSE:HNGR) but similarly valued. These stocks are Cornerstone Building Brands, Inc. (NYSE:CNR), Atara Biotherapeutics Inc (NASDAQ:ATRA), Berry Petroleum Corporation (NASDAQ:BRY), and Community Trust Bancorp, Inc. (NASDAQ:CTBI). This group of stocks’ market caps are closest to HNGR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNR | 18 | 84579 | 3 |
| ATRA | 15 | 357961 | 3 |
| BRY | 18 | 166597 | 0 |
| CTBI | 7 | 17795 | 1 |
| Average | 14.5 | 156733 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $157 million. That figure was $113 million in HNGR’s case. Cornerstone Building Brands, Inc. (NYSE:CNR) is the most popular stock in this table. On the other hand Community Trust Bancorp, Inc. (NASDAQ:CTBI) is the least popular one with only 7 bullish hedge fund positions. Hanger, Inc. (NYSE:HNGR) is not the most popular stock in this group but hedge fund interest is still above 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. Hedge funds were also right about betting on HNGR as the stock returned 28.6% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
