At Insider Monkey, we pore over the filings of nearly 866 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of March 31st. In this article, we will use that wealth of knowledge to determine whether or not Silgan Holdings Inc. (NASDAQ:SLGN) makes for a good investment right now.
Silgan Holdings Inc. (NASDAQ:SLGN) was in 17 hedge funds’ portfolios at the end of March. The all time high for this statistic is 20. SLGN investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. There were 16 hedge funds in our database with SLGN positions at the end of the fourth quarter. Our calculations also showed that SLGN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Chuck Royce of Royce & Associates
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Do Hedge Funds Think SLGN Is A Good Stock To Buy Now?
At Q1’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SLGN over the last 23 quarters. 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, Cardinal Capital was the largest shareholder of Silgan Holdings Inc. (NASDAQ:SLGN), with a stake worth $161.4 million reported as of the end of March. Trailing Cardinal Capital was AQR Capital Management, which amassed a stake valued at $38.6 million. Royce & Associates, Millennium Management, and Holocene Advisors 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 Cardinal Capital allocated the biggest weight to Silgan Holdings Inc. (NASDAQ:SLGN), around 3.95% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.26 percent of its 13F equity portfolio to SLGN.
As industrywide interest jumped, key money managers have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, established the most outsized position in Silgan Holdings Inc. (NASDAQ:SLGN). Holocene Advisors had $1.6 million invested in the company at the end of the quarter. Ali Motamed’s Invenomic Capital Management also initiated a $0.4 million position during the quarter. The other funds with new positions in the stock are Jinghua Yan’s TwinBeech Capital, Qing Li’s Sciencast Management, and Peter Algert’s Algert Global.
Let’s now take a look at hedge fund activity in other stocks similar to Silgan Holdings Inc. (NASDAQ:SLGN). These stocks are The Chemours Company (NYSE:CC), Clean Harbors Inc (NYSE:CLH), Select Medical Holdings Corporation (NYSE:SEM), frontdoor, inc. (NASDAQ:FTDR), HUYA Inc. (NYSE:HUYA), China Biologic Products Holdings Inc (NASDAQ:CBPO), and Houlihan Lokey Inc (NYSE:HLI). All of these stocks’ market caps resemble SLGN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CC | 27 | 544703 | -3 |
| CLH | 27 | 383596 | 5 |
| SEM | 22 | 179000 | 7 |
| FTDR | 36 | 763384 | -1 |
| HUYA | 13 | 335848 | 1 |
| CBPO | 15 | 1001472 | -1 |
| HLI | 16 | 125689 | -10 |
| Average | 22.3 | 476242 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $476 million. That figure was $246 million in SLGN’s case. frontdoor, inc. (NASDAQ:FTDR) is the most popular stock in this table. On the other hand HUYA Inc. (NYSE:HUYA) is the least popular one with only 13 bullish hedge fund positions. Silgan Holdings Inc. (NASDAQ:SLGN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SLGN is 40.2. 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 negative signal and 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately SLGN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SLGN investors were disappointed as the stock returned -6.8% since the end of March (through 7/23) 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 in 2021.
Follow Silgan Holdings Inc (NASDAQ:SLGN)
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Disclosure: None. This article was originally published at Insider Monkey.
