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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Energizer Holdings, Inc. (NYSE:ENR) based on those filings.
Is Energizer Holdings, Inc. (NYSE:ENR) undervalued? Prominent investors were in a pessimistic mood. The number of bullish hedge fund positions shrunk by 4 in recent months. Energizer Holdings, Inc. (NYSE:ENR) was in 22 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that ENR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 26 hedge funds in our database with ENR holdings at the end of December.
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.
Ian Wace of Marshall Wace
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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 we're going to take a peek at the key hedge fund action regarding Energizer Holdings, Inc. (NYSE:ENR).
Do Hedge Funds Think ENR Is A Good Stock To Buy Now?
At the end of March, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ENR over the last 23 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Mario Gabelli's GAMCO Investors has the number one position in Energizer Holdings, Inc. (NYSE:ENR), worth close to $86.6 million, corresponding to 0.8% of its total 13F portfolio. The second largest stake is held by Armistice Capital, managed by Steven Boyd, which holds a $49.7 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism include Israel Englander's Millennium Management, Paul Marshall and Ian Wace's Marshall Wace LLP and Cliff Asness's AQR Capital Management. In terms of the portfolio weights assigned to each position Armistice Capital allocated the biggest weight to Energizer Holdings, Inc. (NYSE:ENR), around 1.14% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, dishing out 0.83 percent of its 13F equity portfolio to ENR.
Judging by the fact that Energizer Holdings, Inc. (NYSE:ENR) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there were a few hedgies that elected to cut their entire stakes heading into Q2. At the top of the heap, Ken Griffin's Citadel Investment Group said goodbye to the largest position of the 750 funds watched by Insider Monkey, worth about $1.9 million in stock, and Richard SchimeláandáLawrence Sapanski's Cinctive Capital Management was right behind this move, as the fund dumped about $1.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 4 funds heading into Q2.
Let's now take a look at hedge fund activity in other stocks similar to Energizer Holdings, Inc. (NYSE:ENR). We will take a look at CNO Financial Group Inc (NYSE:CNO), Ingevity Corporation (NYSE:NGVT), Cathay General Bancorp (NASDAQ:CATY), Turquoise Hill Resources Ltd (NYSE:TRQ), Canaan Inc. (NASDAQ:CAN), CNX Resources Corporation (NYSE:CNX), and Arvinas, Inc. (NASDAQ:ARVN). All of these stocks' market caps resemble ENR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNO,18,380221,1 NGVT,20,280427,-4 CATY,12,130599,2 TRQ,13,575312,1 CAN,9,47017,5 CNX,23,607003,-2 ARVN,28,365585,-6 Average,17.6,340881,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.6 hedge funds with bullish positions and the average amount invested in these stocks was $341 million. That figure was $238 million in ENR's case. Arvinas, Inc. (NASDAQ:ARVN) is the most popular stock in this table. On the other hand Canaan Inc. (NASDAQ:CAN) is the least popular one with only 9 bullish hedge fund positions. Energizer Holdings, Inc. (NYSE:ENR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ENR is 58.8. 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 positive signal but 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately ENR wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ENR were disappointed as the stock returned -13% since the end of March (through 7/16) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.