In this article you are going to find out whether hedge funds think Equitable Holdings, Inc. (NYSE:EQH) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Equitable Holdings, Inc. (NYSE:EQH) was in 45 hedge funds’ portfolios at the end of June. The all time high for this statistic is 46. EQH shareholders have witnessed an increase in hedge fund sentiment in recent months. There were 44 hedge funds in our database with EQH positions at the end of the first quarter. Our calculations also showed that EQH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Ole Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to review the fresh hedge fund action encompassing Equitable Holdings, Inc. (NYSE:EQH).
Do Hedge Funds Think EQH Is A Good Stock To Buy Now?
At the end of June, a total of 45 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in EQH over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Richard S. Pzena’s Pzena Investment Management has the largest position in Equitable Holdings, Inc. (NYSE:EQH), worth close to $621.3 million, corresponding to 2.4% of its total 13F portfolio. On Pzena Investment Management’s heels is Sessa Capital, led by John Petry, holding a $141.2 million position; 5.3% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism consist of Ken Griffin’s Citadel Investment Group, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Jeffrey Altman’s Owl Creek Asset Management. In terms of the portfolio weights assigned to each position Soapstone Capital allocated the biggest weight to Equitable Holdings, Inc. (NYSE:EQH), around 13.75% of its 13F portfolio. Sessa Capital is also relatively very bullish on the stock, dishing out 5.3 percent of its 13F equity portfolio to EQH.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Owl Creek Asset Management, managed by Jeffrey Altman, established the most valuable position in Equitable Holdings, Inc. (NYSE:EQH). Owl Creek Asset Management had $86.4 million invested in the company at the end of the quarter. Renaissance Technologies also made a $50.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Stuart J. Zimmer’s Zimmer Partners, Michael Gelband’s ExodusPoint Capital, and Michael Blitzer’s Kingstown Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Equitable Holdings, Inc. (NYSE:EQH) but similarly valued. These stocks are Hasbro, Inc. (NASDAQ:HAS), Camden Property Trust (NYSE:CPT), Athene Holding Ltd. (NYSE:ATH), Tenaris S.A. (NYSE:TS), Packaging Corporation Of America (NYSE:PKG), Graco Inc. (NYSE:GGG), and DaVita Inc (NYSE:DVA). This group of stocks’ market values are closest to EQH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HAS | 27 | 211638 | -4 |
| CPT | 21 | 440978 | -3 |
| ATH | 43 | 1645361 | -1 |
| TS | 14 | 267623 | 4 |
| PKG | 31 | 444749 | 2 |
| GGG | 24 | 255419 | -1 |
| DVA | 39 | 5131921 | 5 |
| Average | 28.4 | 1199670 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $1200 million. That figure was $1751 million in EQH’s case. Athene Holding Ltd. (NYSE:ATH) is the most popular stock in this table. On the other hand Tenaris S.A. (NYSE:TS) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Equitable Holdings, Inc. (NYSE:EQH) is more popular among hedge funds. Our overall hedge fund sentiment score for EQH is 85.3. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Unfortunately EQH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EQH were disappointed as the stock returned -0.2% since the end of the second quarter (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Equitable Holdings Inc. (NYSE:EQH)
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Disclosure: None. This article was originally published at Insider Monkey.
