At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.
Haverty Furniture Companies, Inc. (NYSE:HVT) has experienced an increase in support from the world’s most elite money managers of late. HVT was in 11 hedge funds’ portfolios at the end of March. There were 10 hedge funds in our database with HVT holdings at the end of the previous quarter. Our calculations also showed that hvt isn’t among the 30 most popular stocks among hedge funds.
According to most investors, hedge funds are assumed to be underperforming, old investment tools of years past. While there are greater than 8000 funds trading at the moment, We look at the top tier of this club, around 750 funds. Most estimates calculate that this group of people preside over the lion’s share of the smart money’s total capital, and by shadowing their matchless investments, Insider Monkey has deciphered several investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We’re going to analyze the key hedge fund action encompassing Haverty Furniture Companies, Inc. (NYSE:HVT).
How have hedgies been trading Haverty Furniture Companies, Inc. (NYSE:HVT)?
Heading into the second quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in HVT 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 boosting their stakes meaningfully (or already accumulated large positions).
The largest stake in Haverty Furniture Companies, Inc. (NYSE:HVT) was held by Renaissance Technologies, which reported holding $32.3 million worth of stock at the end of March. It was followed by Royce & Associates with a $27.2 million position. Other investors bullish on the company included Arrowstreet Capital, Millennium Management, and D E Shaw.
Consequently, key hedge funds have been driving this bullishness. Element Capital Management, managed by Jeffrey Talpins, initiated the biggest position in Haverty Furniture Companies, Inc. (NYSE:HVT). Element Capital Management had $0.3 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also made a $0.2 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Haverty Furniture Companies, Inc. (NYSE:HVT) but similarly valued. These stocks are Adaptimmune Therapeutics plc (NASDAQ:ADAP), PCM, Inc. (NASDAQ:PCMI), CVR Partners LP (NYSE:UAN), and Gravity Co., LTD. (NASDAQ:GRVY). This group of stocks’ market valuations are closest to HVT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADAP | 10 | 152333 | -2 |
| PCMI | 17 | 40529 | 6 |
| UAN | 5 | 43910 | 1 |
| GRVY | 1 | 693 | 0 |
| Average | 8.25 | 59366 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $59 million. That figure was $75 million in HVT’s case. PCM, Inc. (NASDAQ:PCMI) is the most popular stock in this table. On the other hand Gravity Co., LTD. (NASDAQ:GRVY) is the least popular one with only 1 bullish hedge fund positions. Haverty Furniture Companies, Inc. (NYSE:HVT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately HVT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HVT were disappointed as the stock returned -22.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
