Before we spend many hours researching a company, we’d like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of JELD-WEN Holding, Inc. (NYSE:JELD).
JELD-WEN Holding, Inc. (NYSE:JELD) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds’ portfolios at the end of the third quarter of 2018. At the end of this article we will also compare JELD to other stocks including Nuveen Quality Municipal Income Fund (NYSE:NAD), Worthington Industries, Inc. (NYSE:WOR), and Aerojet Rocketdyne Holdings Inc (NYSE:AJRD) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a peek at the key hedge fund action surrounding JELD-WEN Holding, Inc. (NYSE:JELD).
How have hedgies been trading JELD-WEN Holding, Inc. (NYSE:JELD)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, no change from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in JELD over the last 13 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Jonathan Auerbach’s Hound Partners has the most valuable position in JELD-WEN Holding, Inc. (NYSE:JELD), worth close to $202.7 million, amounting to 4.7% of its total 13F portfolio. On Hound Partners’s heels is Pzena Investment Management, managed by Richard S. Pzena, which holds a $169.4 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other peers that hold long positions consist of John Smith Clark’s Southpoint Capital Advisors, Richard Barrera’s Roystone Capital Partners and Thomas Ellis and Todd Hammer’s North Run Capital.
Judging by the fact that JELD-WEN Holding, Inc. (NYSE:JELD) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedge funds who sold off their entire stakes in the third quarter. Interestingly, Anthony Joseph Vaccarino’s North Fourth Asset Management dropped the biggest position of the 700 funds tracked by Insider Monkey, comprising close to $8.4 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund dumped about $0.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to JELD-WEN Holding, Inc. (NYSE:JELD). These stocks are Nuveen Quality Municipal Income Fund (NYSE:NAD), Worthington Industries, Inc. (NYSE:WOR), Aerojet Rocketdyne Holdings Inc (NYSE:AJRD), and Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY). All of these stocks’ market caps match JELD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NAD | 4 | 2101 | 1 |
| WOR | 10 | 72428 | -2 |
| AJRD | 19 | 372726 | 7 |
| PLAY | 22 | 249056 | 3 |
| Average | 13.75 | 174078 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $174 million. That figure was $448 million in JELD’s case. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is the most popular stock in this table. On the other hand Nuveen Quality Municipal Income Fund (NYSE:NAD) is the least popular one with only 4 bullish hedge fund positions. JELD-WEN Holding, Inc. (NYSE:JELD) 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 PLAY might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
