The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Standex International Corporation (NYSE:SXI).
Is Standex International Corporation (NYSE:SXI) a safe investment now? Money managers are reducing their bets on the stock. The number of long hedge fund bets fell by 2 recently. Our calculations also showed that SXI isn’t among the 30 most popular stocks among hedge funds (see the video below). SXI was in 9 hedge funds’ portfolios at the end of the second quarter of 2019. There were 11 hedge funds in our database with SXI holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a gander at the key hedge fund action regarding Standex International Corporation (NYSE:SXI).
How have hedgies been trading Standex International Corporation (NYSE:SXI)?
At the end of the second quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in SXI a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in Standex International Corporation (NYSE:SXI) was held by Millennium Management, which reported holding $11.4 million worth of stock at the end of March. It was followed by Cove Street Capital with a $8.8 million position. Other investors bullish on the company included GAMCO Investors, Royce & Associates, and AQR Capital Management.
Because Standex International Corporation (NYSE:SXI) has experienced a decline in interest from hedge fund managers, logic holds that there were a few fund managers that decided to sell off their entire stakes last quarter. Intriguingly, D. E. Shaw’s D E Shaw cut the biggest position of the 750 funds monitored by Insider Monkey, comprising close to $0.4 million in stock, and Roger Ibbotson’s Zebra Capital Management was right behind this move, as the fund sold off about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Standex International Corporation (NYSE:SXI). These stocks are Zymeworks Inc. (NYSE:ZYME), Interface, Inc. (NASDAQ:TILE), CTS Corporation (NYSE:CTS), and General American Investors Company, Inc. (NYSE:GAM). This group of stocks’ market caps resemble SXI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZYME | 14 | 297349 | 0 |
| TILE | 12 | 36187 | -2 |
| CTS | 9 | 80933 | -1 |
| GAM | 5 | 128273 | 0 |
| Average | 10 | 135686 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $32 million in SXI’s case. Zymeworks Inc. (NYSE:ZYME) is the most popular stock in this table. On the other hand General American Investors Company, Inc. (NYSE:GAM) is the least popular one with only 5 bullish hedge fund positions. Standex International Corporation (NYSE:SXI) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SXI wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SXI investors were disappointed as the stock returned 0% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
