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Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about EnerSys (NYSE:ENS) in this article.
Is ENS stock a buy? EnerSys (NYSE:ENS) investors should pay attention to an increase in support from the world's most elite money managers lately. EnerSys (NYSE:ENS) was in 24 hedge funds' portfolios at the end of December. The all time high for this statistic is 26. There were 22 hedge funds in our database with ENS holdings at the end of September. Our calculations also showed that ENS isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
In today’s marketplace there are several indicators stock traders put to use to grade their holdings. A pair of the best indicators are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can beat their index-focused peers by a solid amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 197% since March 2017 (through March 2021) and beat the S&P 500 Index by 124 percentage points. You can download a sample issue of this newsletter on our website .
Jim Simons of Renaissance Technologies
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now we're going to view the recent hedge fund action surrounding EnerSys (NYSE:ENS).
Do Hedge Funds Think ENS Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in ENS a year ago. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, Rubric Capital Management held the most valuable stake in EnerSys (NYSE:ENS), which was worth $35.4 million at the end of the fourth quarter. On the second spot was Hill City Capital which amassed $18.3 million worth of shares. ACK Asset Management, One Fin Capital Management, and Skylands Capital 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 Hill City Capital allocated the biggest weight to EnerSys (NYSE:ENS), around 9.91% of its 13F portfolio. One Fin Capital Management is also relatively very bullish on the stock, setting aside 6.79 percent of its 13F equity portfolio to ENS.
As aggregate interest increased, key hedge funds were breaking ground themselves. Hill City Capital, managed by Herbert Frazier, created the most valuable position in EnerSys (NYSE:ENS). Hill City Capital had $18.3 million invested in the company at the end of the quarter. Len Kipp and Xavier Majic's Maple Rock Capital also initiated a $3.3 million position during the quarter. The following funds were also among the new ENS investors: Christopher Hillary's Roubaix Capital, Phil Frohlich's Prescott Group Capital Management, and Mika Toikka's AlphaCrest Capital Management.
Let's also examine hedge fund activity in other stocks similar to EnerSys (NYSE:ENS). We will take a look at Shake Shack Inc (NYSE:SHAK), Legend Biotech Corporation (NASDAQ:LEGN), Wintrust Financial Corporation (NASDAQ:WTFC), Seaboard Corporation (NYSE:SEB), Intellia Therapeutics, Inc. (NASDAQ:NTLA), Methanex Corporation (NASDAQ:MEOH), and EQT Corporation (NYSE:EQT). All of these stocks' market caps are closest to ENS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SHAK,25,619287,-1 LEGN,13,334716,0 WTFC,19,137643,-1 SEB,13,111127,-3 NTLA,30,835298,15 MEOH,12,111615,-4 EQT,43,355417,4 Average,22.1,357872,1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $358 million. That figure was $139 million in ENS's case. EQT Corporation (NYSE:EQT) is the most popular stock in this table. On the other hand Methanex Corporation (NASDAQ:MEOH) is the least popular one with only 12 bullish hedge fund positions. EnerSys (NYSE:ENS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ENS is 54. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately ENS wasn't nearly as popular as these 30 stocks and hedge funds that were betting on ENS were disappointed as the stock returned 10.9% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.