The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider EnLink Midstream LLC (NYSE:ENLC) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
EnLink Midstream LLC (NYSE:ENLC) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds' portfolios at the end of September. At the end of this article we will also compare ENLC to other stocks including RBC Bearings Incorporated (NASDAQ:ROLL), Sterling Bancorp (NYSE:STL), and Lumentum Holdings Inc (NASDAQ:LITE) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are seen as unimportant, old investment tools of the past. While there are greater than 8000 funds in operation at present, Our experts look at the aristocrats of this club, about 750 funds. These investment experts orchestrate the majority of the smart money's total asset base, and by following their highest performing picks, Insider Monkey has deciphered a number of investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_728376" align="alignnone" width="1613"] Jonathan Barrett of Luminus Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a glance at the new hedge fund action encompassing EnLink Midstream LLC (NYSE:ENLC).
What does smart money think about EnLink Midstream LLC (NYSE:ENLC)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2019. On the other hand, there were a total of 13 hedge funds with a bullish position in ENLC a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Nokomis Capital, managed by Brett Hendrickson, holds the most valuable position in EnLink Midstream LLC (NYSE:ENLC). Nokomis Capital has a $12 million position in the stock, comprising 2.6% of its 13F portfolio. Coming in second is Luminus Management, managed by Jonathan Barrett and Paul Segal, which holds a $9.5 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions comprise Stuart J. Zimmer's Zimmer Partners, Brandon Haley's Holocene Advisors and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Nokomis Capital allocated the biggest weight to EnLink Midstream LLC (NYSE:ENLC), around 2.59% of its 13F portfolio. BP Capital is also relatively very bullish on the stock, dishing out 1.31 percent of its 13F equity portfolio to ENLC.
Judging by the fact that EnLink Midstream LLC (NYSE:ENLC) has experienced declining sentiment from hedge fund managers, it's safe to say that there is a sect of funds that slashed their full holdings in the third quarter. Interestingly, John Thiessen's Vertex One Asset Management dropped the biggest position of the 750 funds watched by Insider Monkey, worth close to $4.3 million in stock, and Donald Sussman's Paloma Partners was right behind this move, as the fund cut about $3.7 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as EnLink Midstream LLC (NYSE:ENLC) but similarly valued. These stocks are RBC Bearings Incorporated (NASDAQ:ROLL), Sterling Bancorp (NYSE:STL), Lumentum Holdings Inc (NASDAQ:LITE), and Pivotal Software, Inc. (NYSE:PVTL). All of these stocks' market caps match ENLC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ROLL,7,61593,1 STL,23,407369,2 LITE,29,219330,-1 PVTL,22,275424,2 Average,20.25,240929,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $241 million. That figure was $38 million in ENLC's case. Lumentum Holdings Inc (NASDAQ:LITE) is the most popular stock in this table. On the other hand RBC Bearings Incorporated (NASDAQ:ROLL) is the least popular one with only 7 bullish hedge fund positions. EnLink Midstream LLC (NYSE:ENLC) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately ENLC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ENLC investors were disappointed as the stock returned -41.8% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.