Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Equitable Holdings, Inc. (NYSE:EQH).
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 has experienced an increase in hedge fund sentiment in recent months. There were 44 hedge funds in our database with EQH holdings at the end of March. Our calculations also showed that EQH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
If you’d ask most traders, hedge funds are seen as unimportant, outdated investment tools of the past. While there are more than 8000 funds trading at present, We choose to focus on the top tier of this group, approximately 850 funds. These hedge fund managers preside over bulk of the smart money’s total asset base, and by monitoring their top picks, Insider Monkey has revealed a few investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
John Petry of Sessa Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining 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 check out the recent 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 the second quarter, 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. On the other hand, there were a total of 39 hedge funds with a bullish position in EQH a year ago. So, let’s review 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 Equitable Holdings, Inc. (NYSE:EQH), with a stake worth $621.3 million reported as of the end of June. Trailing Pzena Investment Management was Sessa Capital, which amassed a stake valued at $141.2 million. Citadel Investment Group, Arrowstreet Capital, and Owl Creek Asset 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 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, setting aside 5.3 percent of its 13F equity portfolio to EQH.
As industrywide interest jumped, key money managers have been driving this bullishness. 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 go over hedge fund activity in other stocks similar to Equitable Holdings, Inc. (NYSE:EQH). We will take a look at 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 caps resemble EQH’s market cap.
| 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 returned 29.6% in 2021 through November 5th but still managed to beat the market by 3.1 percentage points. Hedge funds were also right about betting on EQH as the stock returned 16.2% since the end of June (through 11/5) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Equitable Holdings Inc. (NYSE:EQH)
Follow Equitable Holdings Inc. (NYSE:EQH)
Suggested Articles:
Disclosure: None. This article was originally published at Insider Monkey.
