The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Hewlett Packard Enterprise Company (NYSE:HPE) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Hewlett Packard Enterprise Company (NYSE:HPE) the right investment to pursue these days? The smart money was becoming less hopeful. The number of long hedge fund positions shrunk by 1 recently. Hewlett Packard Enterprise Company (NYSE:HPE) was in 33 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 71. Our calculations also showed that HPE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 34 hedge funds in our database with HPE holdings at the end of June.
Robert Atchinson of Adage Capital Management
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. Now let’s take a look at the key hedge fund action surrounding Hewlett Packard Enterprise Company (NYSE:HPE).
Do Hedge Funds Think HPE Is A Good Stock To Buy Now?
At third quarter’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HPE over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Pzena Investment Management was the largest shareholder of Hewlett Packard Enterprise Company (NYSE:HPE), with a stake worth $618.1 million reported as of the end of September. Trailing Pzena Investment Management was Arrowstreet Capital, which amassed a stake valued at $136.1 million. Oldfield Partners, Balyasny Asset Management, and Adage 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 Oldfield Partners allocated the biggest weight to Hewlett Packard Enterprise Company (NYSE:HPE), around 10.73% of its 13F portfolio. Pzena Investment Management is also relatively very bullish on the stock, designating 2.45 percent of its 13F equity portfolio to HPE.
Since Hewlett Packard Enterprise Company (NYSE:HPE) has witnessed declining sentiment from the smart money, we can see that there were a few hedge funds that elected to cut their full holdings last quarter. Intriguingly, Renaissance Technologies cut the biggest position of the “upper crust” of funds watched by Insider Monkey, valued at close to $49.2 million in stock, and Michael Rockefeller and KarláKroeker’s Woodline Partners was right behind this move, as the fund dropped about $11.2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hewlett Packard Enterprise Company (NYSE:HPE) but similarly valued. These stocks are Qorvo Inc (NASDAQ:QRVO), Cincinnati Financial Corporation (NASDAQ:CINF), Ally Financial Inc (NYSE:ALLY), Duke Realty Corporation (NYSE:DRE), KB Financial Group, Inc. (NYSE:KB), Healthpeak Properties, Inc. (NYSE:PEAK), and Teradyne, Inc. (NYSE:TER). This group of stocks’ market caps are similar to HPE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| QRVO | 44 | 1950993 | 4 |
| CINF | 20 | 661958 | -2 |
| ALLY | 57 | 2517368 | 3 |
| DRE | 13 | 67287 | -2 |
| KB | 8 | 21128 | 0 |
| PEAK | 20 | 202911 | -2 |
| TER | 42 | 1369839 | -2 |
| Average | 29.1 | 970212 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.1 hedge funds with bullish positions and the average amount invested in these stocks was $970 million. That figure was $1002 million in HPE’s case. Ally Financial Inc (NYSE:ALLY) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 8 bullish hedge fund positions. Hewlett Packard Enterprise Company (NYSE:HPE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HPE is 43.5. 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 HPE as the stock returned 15.5% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Hewlett Packard Enterprise Co (NYSE:HPE)
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Disclosure: None. This article was originally published at Insider Monkey.
