Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Signet Jewelers Limited (NYSE:SIG) based on that data and determine whether they were really smart about the stock.
Hedge fund interest in Signet Jewelers Limited (NYSE:SIG) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that SIG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare SIG to other stocks including Ballard Power Systems Inc. (NASDAQ:BLDP), Mimecast Limited (NASDAQ:MIME), and Open Lending Corporation (NASDAQ:LPRO) to get a better sense of its popularity.
Peter Rathjens of Arrowstreet Capital
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. Keeping this in mind we’re going to take a look at the fresh hedge fund action surrounding Signet Jewelers Limited (NYSE:SIG).
Do Hedge Funds Think SIG Is A Good Stock To Buy Now?
At third quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2021. On the other hand, there were a total of 22 hedge funds with a bullish position in SIG a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Select Equity Group was the largest shareholder of Signet Jewelers Limited (NYSE:SIG), with a stake worth $413 million reported as of the end of September. Trailing Select Equity Group was D E Shaw, which amassed a stake valued at $151.6 million. Contrarius Investment Management, Arrowstreet Capital, and Melvin Capital Management 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 Contrarius Investment Management allocated the biggest weight to Signet Jewelers Limited (NYSE:SIG), around 6.88% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, setting aside 3.86 percent of its 13F equity portfolio to SIG.
Due to the fact that Signet Jewelers Limited (NYSE:SIG) has faced falling interest from hedge fund managers, it’s safe to say that there were a few hedge funds that slashed their full holdings last quarter. Intriguingly, Kerr Neilson’s Platinum Asset Management said goodbye to the largest stake of all the hedgies monitored by Insider Monkey, worth close to $7.5 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also sold off its stock, about $1.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Signet Jewelers Limited (NYSE:SIG). These stocks are Ballard Power Systems Inc. (NASDAQ:BLDP), Mimecast Limited (NASDAQ:MIME), Open Lending Corporation (NASDAQ:LPRO), AppFolio Inc (NASDAQ:APPF), Amyris Inc (NASDAQ:AMRS), Cushman & Wakefield plc (NYSE:CWK), and Qurate Retail, Inc. (NASDAQ:QRTEA). All of these stocks’ market caps are closest to SIG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BLDP | 15 | 59388 | 0 |
| MIME | 28 | 369142 | 4 |
| LPRO | 28 | 382084 | 4 |
| APPF | 15 | 371709 | -2 |
| AMRS | 17 | 403439 | -4 |
| CWK | 24 | 187323 | 1 |
| QRTEA | 34 | 676717 | -5 |
| Average | 23 | 349972 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $1165 million in SIG’s case. Qurate Retail, Inc. (NASDAQ:QRTEA) is the most popular stock in this table. On the other hand Ballard Power Systems Inc. (NASDAQ:BLDP) is the least popular one with only 15 bullish hedge fund positions. Signet Jewelers Limited (NYSE:SIG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SIG is 70.4. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on SIG as the stock returned 9.6% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Signet Jewelers Ltd (NYSE:SIG)
Follow Signet Jewelers Ltd (NYSE:SIG)
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Disclosure: None. This article was originally published at Insider Monkey.
