Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Hewlett Packard Enterprise Company (NYSE:HPE).
Hewlett Packard Enterprise Company (NYSE:HPE) has experienced an increase in support from the world’s most elite money managers in recent months. Hewlett Packard Enterprise Company (NYSE:HPE) was in 34 hedge funds’ portfolios at the end of June. The all time high for this statistic is 71. There were 27 hedge funds in our database with HPE holdings at the end of March. Our calculations also showed that HPE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Mario Gabelli of GAMCO Investors
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Do Hedge Funds Think HPE Is A Good Stock To Buy Now?
At Q2’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HPE over the last 24 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
The largest stake in Hewlett Packard Enterprise Company (NYSE:HPE) was held by Pzena Investment Management, which reported holding $631.9 million worth of stock at the end of June. It was followed by Arrowstreet Capital with a $196 million position. Other investors bullish on the company included Renaissance Technologies, AQR Capital Management, and GAMCO Investors. In terms of the portfolio weights assigned to each position Pzena Investment Management allocated the biggest weight to Hewlett Packard Enterprise Company (NYSE:HPE), around 2.46% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, dishing out 0.61 percent of its 13F equity portfolio to HPE.
Consequently, key hedge funds have been driving this bullishness. Renaissance Technologies, established the biggest position in Hewlett Packard Enterprise Company (NYSE:HPE). Renaissance Technologies had $49.2 million invested in the company at the end of the quarter. Michael Rockefeller and KarláKroeker’s Woodline Partners also made a $11.2 million investment in the stock during the quarter. The following funds were also among the new HPE investors: Mark Coe’s Intrinsic Edge Capital, Ray Dalio’s Bridgewater Associates, and Noam Gottesman’s GLG Partners.
Let’s go over hedge fund activity in other stocks similar to Hewlett Packard Enterprise Company (NYSE:HPE). We will take a look at Akamai Technologies, Inc. (NASDAQ:AKAM), Ulta Beauty, Inc. (NASDAQ:ULTA), HEICO Corporation (NYSE:HEI), Insulet Corporation (NASDAQ:PODD), Cincinnati Financial Corporation (NASDAQ:CINF), Teleflex Incorporated (NYSE:TFX), and Broadridge Financial Solutions, Inc. (NYSE:BR). This group of stocks’ market caps are closest to HPE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AKAM | 30 | 273261 | 5 |
| ULTA | 40 | 1213090 | -6 |
| HEI | 41 | 644494 | -4 |
| PODD | 38 | 1447274 | -1 |
| CINF | 22 | 780728 | 0 |
| TFX | 30 | 701718 | -3 |
| BR | 27 | 315722 | 5 |
| Average | 32.6 | 768041 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $768 million. That figure was $1015 million in HPE’s case. HEICO Corporation (NYSE:HEI) is the most popular stock in this table. On the other hand Cincinnati Financial Corporation (NASDAQ:CINF) is the least popular one with only 22 bullish hedge fund positions. Hewlett Packard Enterprise Company (NYSE:HPE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HPE is 55.9. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on HPE as the stock returned 2.8% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Hewlett Packard Enterprise Co (NYSE:HPE)
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Disclosure: None. This article was originally published at Insider Monkey.
