As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the third quarter. We get to see hedge funds' thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Energizer Holdings, Inc. (NYSE:ENR).
Energizer Holdings, Inc. (NYSE:ENR) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds' portfolios at the end of September. At the end of this article we will also compare ENR to other stocks including KB Home (NYSE:KBH), Valmont Industries, Inc. (NYSE:VMI), and BancorpSouth Bank (NYSE:BXS) 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.
Why do we pay any attention at all to hedge fund sentiment? 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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_25251" align="aligncenter" width="450"] George Soros of Soros Fund 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. We're going to go over the new hedge fund action surrounding Energizer Holdings, Inc. (NYSE:ENR).
Hedge fund activity in Energizer Holdings, Inc. (NYSE:ENR)
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2019. By comparison, 26 hedge funds held shares or bullish call options in ENR a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, GAMCO Investors held the most valuable stake in Energizer Holdings, Inc. (NYSE:ENR), which was worth $78.4 million at the end of the third quarter. On the second spot was Armistice Capital which amassed $34.9 million worth of shares. Soros Fund Management, Millennium Management, and Winton Capital Management 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 Armistice Capital allocated the biggest weight to Energizer Holdings, Inc. (NYSE:ENR), around 2.31% of its 13F portfolio. Aequim Alternative Investments is also relatively very bullish on the stock, designating 0.95 percent of its 13F equity portfolio to ENR.
Since Energizer Holdings, Inc. (NYSE:ENR) has faced falling interest from the entirety of the hedge funds we track, we can see that there exists a select few hedgies who were dropping their entire stakes heading into Q4. Intriguingly, Dmitry Balyasny's Balyasny Asset Management cut the biggest position of all the hedgies monitored by Insider Monkey, comprising about $15.8 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund cut about $10.8 million worth. These moves are important to note, as aggregate 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 - not necessarily in the same industry as Energizer Holdings, Inc. (NYSE:ENR) but similarly valued. We will take a look at KB Home (NYSE:KBH), Valmont Industries, Inc. (NYSE:VMI), BancorpSouth Bank (NYSE:BXS), and Houlihan Lokey Inc (NYSE:HLI). 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 KBH,26,572848,9 VMI,25,288741,0 BXS,12,82186,0 HLI,14,136860,-1 Average,19.25,270159,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $270 million. That figure was $215 million in ENR's case. KB Home (NYSE:KBH) is the most popular stock in this table. On the other hand BancorpSouth Bank (NYSE:BXS) is the least popular one with only 12 bullish hedge fund positions. Energizer Holdings, Inc. (NYSE:ENR) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on ENR as the stock returned 15.2% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.