Technology stocks had a lousy start to 2022. QQQ lost 9% of its value in January. Pandemic winners are getting crushed while energy stocks are surging. Roblox lost 36%, Moderna lost 33%, and Carvana and Shopify lost 30% of their values in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Evercore Inc. (NYSE:EVR) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Evercore Inc. (NYSE:EVR) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 33. EVR has experienced an increase in support from the world’s most elite money managers recently. There were 31 hedge funds in our database with EVR holdings at the end of June. Our calculations also showed that EVR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to take a peek at the recent hedge fund action surrounding Evercore Inc. (NYSE:EVR).
John Rogers of Ariel Investments
Do Hedge Funds Think EVR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards EVR over the last 25 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Evercore Inc. (NYSE:EVR), which was worth $96.6 million at the end of the third quarter. On the second spot was Point72 Asset Management which amassed $54 million worth of shares. Nitorum Capital, Ariel Investments, and GLG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Full18 Capital allocated the biggest weight to Evercore Inc. (NYSE:EVR), around 2.94% of its 13F portfolio. Nitorum Capital is also relatively very bullish on the stock, setting aside 1.91 percent of its 13F equity portfolio to EVR.
As one would reasonably expect, key money managers have jumped into Evercore Inc. (NYSE:EVR) headfirst. Point72 Asset Management, managed by Steve Cohen, established the most valuable position in Evercore Inc. (NYSE:EVR). Point72 Asset Management had $54 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $8.8 million position during the quarter. The other funds with new positions in the stock are Renaissance Technologies, Paul Tudor Jones’s Tudor Investment Corp, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management.
Let’s go over hedge fund activity in other stocks similar to Evercore Inc. (NYSE:EVR). These stocks are Glacier Bancorp, Inc. (NYSE:GBCI), Twist Bioscience Corporation (NASDAQ:TWST), Newegg Commerce Inc. (NASDAQ:NEGG), Iridium Communications Inc. (NASDAQ:IRDM), Redfin Corporation (NASDAQ:RDFN), Alight Inc. (NYSE:ALIT), and Compass Inc. (NYSE:COMP). All of these stocks’ market caps resemble EVR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GBCI | 15 | 62962 | 4 |
| TWST | 19 | 780112 | -4 |
| NEGG | 5 | 2118 | 5 |
| IRDM | 24 | 684981 | 6 |
| RDFN | 12 | 551336 | -5 |
| ALIT | 42 | 1278015 | 42 |
| COMP | 25 | 708383 | 25 |
| Average | 20.3 | 581130 | 10.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $581 million. That figure was $389 million in EVR’s case. Alight Inc. (NYSE:ALIT) is the most popular stock in this table. On the other hand Newegg Commerce Inc. (NASDAQ:NEGG) is the least popular one with only 5 bullish hedge fund positions. Evercore Inc. (NYSE:EVR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EVR is 71.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, EVR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EVR were disappointed as the stock returned -6.2% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
