Is Sensata Technologies Holding N.V. (ST) A Good Stock To Buy?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the third quarter we observed increased volatility and small-cap stocks underperformed the market. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Sensata Technologies Holding N.V. (NYSE:ST) to find out whether it was one of their high conviction long-term ideas.

Sensata Technologies Holding N.V. (NYSE:ST) was in 28 hedge funds’ portfolios at the end of the third quarter of 2015. ST shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 33 hedge funds in our database with ST positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Fibria Celulose SA (ADR) (NYSE:FBR), Mallinckrodt PLC (NYSE:MNK), and Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) to gather more data points.

In the financial world there are a multitude of metrics shareholders can use to grade publicly traded companies. Two of the most innovative metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite investment managers can outpace the S&P 500 by a significant amount (see the details here).

Keeping this in mind, let’s view the latest action surrounding Sensata Technologies Holding N.V. (NYSE:ST).

How have hedgies been trading Sensata Technologies Holding N.V. (NYSE:ST)?

At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, John Griffin’s Blue Ridge Capital has the most valuable position in Sensata Technologies Holding N.V. (NYSE:ST), worth close to $296.4 million, corresponding to 3.4% of its total 13F portfolio. The second most bullish fund manager is Cantillon Capital Management, managed by William von Mueffling, which holds a $264.7 million position; the fund has 5.6% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish contain Lee Ainslie’s Maverick Capital, Robert Joseph Caruso’s Select Equity Group and Sharlyn C. Heslam’s Stockbridge Partners.