U.S. Markets closed

AXA Equitable Holdings, Inc. (EQH): Are Hedge Funds Right About This Stock?

Nina Todic

Is AXA Equitable Holdings, Inc. (NYSE:EQH) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

AXA Equitable Holdings, Inc. (NYSE:EQH) was in 21 hedge funds' portfolios at the end of September. EQH investors should pay attention to an increase in hedge fund interest of late. There were 19 hedge funds in our database with EQH positions at the end of the previous quarter. Our calculations also showed that eqh isn't among the 30 most popular stocks among hedge funds.

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ken Griffin

Let's review the latest hedge fund action regarding AXA Equitable Holdings, Inc. (NYSE:EQH).

How have hedgies been trading AXA Equitable Holdings, Inc. (NYSE:EQH)?

At Q3's end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in EQH over the last 13 quarters. With hedgies' capital changing hands, there exists an "upper tier" of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

No of Hedge Funds with EQH Positions

More specifically, Pzena Investment Management was the largest shareholder of AXA Equitable Holdings, Inc. (NYSE:EQH), with a stake worth $302.5 million reported as of the end of September. Trailing Pzena Investment Management was Citadel Investment Group, which amassed a stake valued at $176.1 million. Empyrean Capital Partners, Alyeska Investment Group, and Sessa Capital were also very fond of the stock, giving the stock large weights in their portfolios.

Consequently, key money managers were breaking ground themselves. D E Shaw, managed by D. E. Shaw, initiated the most outsized position in AXA Equitable Holdings, Inc. (NYSE:EQH). D E Shaw had $6.7 million invested in the company at the end of the quarter. Ian Simm's Impax Asset Management also made a $3.5 million investment in the stock during the quarter. The other funds with new positions in the stock are David Costen Haley's HBK Investments, Nick Thakore's Diametric Capital, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as AXA Equitable Holdings, Inc. (NYSE:EQH) but similarly valued. We will take a look at Sociedad Química y Minera de Chile S.A. (NYSE:SQM), Copart, Inc. (NASDAQ:CPRT), InterContinental Hotels Group PLC (NYSE:IHG), and DaVita Inc (NYSE:DVA). This group of stocks' market valuations are closest to EQH's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SQM,9,70961,-6 CPRT,31,248204,3 IHG,3,21513,-2 DVA,42,4001510,8 Average,21.25,1085547,0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.25 hedge funds with bullish positions and the average amount invested in these stocks was $1.09 billion. That figure was $763 million in EQH's case. DaVita Inc (NYSE:DVA) is the most popular stock in this table. On the other hand InterContinental Hotels Group PLC (NYSE:IHG) is the least popular one with only 3 bullish hedge fund positions. AXA Equitable Holdings, Inc. (NYSE:EQH) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. In this regard DVA might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.

Related Content