We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of StoneMor Inc. (NYSE:STON) based on that data.
StoneMor Inc. (NYSE:STON) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that STON isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare STON to other stocks including Inotiv, Inc. (NASDAQ:NOTV), IMV Inc. (NASDAQ:IMV), and Republic First Bancorp, Inc. (NASDAQ:FRBK) to get a better sense of its popularity.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. Now let’s check out the recent hedge fund action encompassing StoneMor Inc. (NYSE:STON).
Do Hedge Funds Think STON Is A Good Stock To Buy Now?
At first quarter’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards STON over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Andrew Axelrod’s Axar Capital has the largest position in StoneMor Inc. (NYSE:STON), worth close to $157.1 million, amounting to 99.5% of its total 13F portfolio. On Axar Capital’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions contain Michael Gelband’s ExodusPoint Capital, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Axar Capital allocated the biggest weight to StoneMor Inc. (NYSE:STON), around 99.48% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, dishing out 0.0017 percent of its 13F equity portfolio to STON.
Because StoneMor Inc. (NYSE:STON) has faced declining sentiment from hedge fund managers, it’s safe to say that there is a sect of hedgies that slashed their entire stakes in the first quarter. At the top of the heap, Renaissance Technologies said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, worth close to $0.1 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund cut about $0 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to StoneMor Inc. (NYSE:STON). These stocks are Inotiv, Inc. (NASDAQ:NOTV), IMV Inc. (NASDAQ:IMV), Republic First Bancorp, Inc. (NASDAQ:FRBK), Tuscan Holdings Corp. II (NASDAQ:THCA), Jaguar Health, Inc. (NASDAQ:JAGX), Paysign, Inc. (NASDAQ:PAYS), and Galera Therapeutics, Inc. (NASDAQ:GRTX). This group of stocks’ market valuations resemble STON’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NOTV | 9 | 28205 | 6 |
| IMV | 2 | 1007 | -2 |
| FRBK | 6 | 6040 | 0 |
| THCA | 15 | 50195 | 5 |
| JAGX | 5 | 2328 | 4 |
| PAYS | 10 | 10196 | -3 |
| GRTX | 9 | 36818 | 1 |
| Average | 8 | 19256 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $158 million in STON’s case. Tuscan Holdings Corp. II (NASDAQ:THCA) is the most popular stock in this table. On the other hand IMV Inc. (NASDAQ:IMV) is the least popular one with only 2 bullish hedge fund positions. StoneMor Inc. (NYSE:STON) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for STON is 50.4. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on STON as the stock returned 46.6% since the end of the first quarter (through 6/25) and outperformed the market by an even larger margin.
Follow Stonemor Inc. (NYSE:STON)
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Disclosure: None. This article was originally published at Insider Monkey.
