More and More Hedge Funds Are Buying Entegris Inc (ENTG)

Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.

Is Entegris Inc (NASDAQ:ENTG) the right investment to pursue these days? Hedge funds are taking an optimistic view. The number of long hedge fund positions rose by 5 lately. ENTG was in 21 hedge funds’ portfolios at the end of the third quarter of 2016. There were 16 hedge funds in our database with ENTG 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 Platform Specialty Products Corp (NYSE:PAH), Silicon Laboratories (NASDAQ:SLAB), and Hawaiian Holdings, Inc. (NASDAQ:HA) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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What have hedge funds been doing with Entegris Inc (NASDAQ:ENTG)?

At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 31% boost from one quarter earlier. Hedge fund ownership of ENTG has been volatile, but did hit a yearly high on September 30. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Thomas E. Claugus’ GMT Capital has the number one position in Entegris Inc (NASDAQ:ENTG), worth close to $240.3 million, accounting for 4.9% of its total 13F portfolio. The second largest stake is held by RGM Capital, led by Robert G. Moses, holding a $67.8 million position; the fund has 7.6% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism contain Mariko Gordon’s Daruma Asset Management, Jim Simons’ Renaissance Technologies and Israel Englander’s Millennium Management.

As one would reasonably expect, some big names were leading the bulls’ herd. Millennium Management established the most valuable position in Entegris Inc (NASDAQ:ENTG). Millennium Management had $11.3 million invested in the company at the end of the quarter. Wojciech Uzdelewicz’s Espalier Global Management also made a $0.7 million investment in the stock during the quarter. The following funds were also among the new ENTG investors: Joel Greenblatt’s Gotham Asset Management, Matthew Tewksbury’s Stevens Capital Management, and Ken Griffin’s Citadel Investment Group.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Entegris Inc (NASDAQ:ENTG) but similarly valued. We will take a look at Platform Specialty Products Corp (NYSE:PAH), Silicon Laboratories (NASDAQ:SLAB), Hawaiian Holdings, Inc. (NASDAQ:HA), and Essent Group Ltd (NYSE:ESNT). All of these stocks’ market caps resemble ENTG’s market cap.

As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $360 million. That figure was $429 million in ENTG’s case. Platform Specialty Products Corp (NYSE:PAH) is the most popular stock in this table. On the other hand Silicon Laboratories (NASDAQ:SLAB) is the least popular one with only 15 bullish hedge fund positions. Entegris Inc (NASDAQ:ENTG) 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 PAH might be a better candidate to consider a long position. However, ENTG may be worth watching, as sentiment continues to improve among the smart money.

Disclosure: None