Hedge Funds Aren’t Crazy About Helen of Troy Limited (HELE) Anymore
After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Helen of Troy Limited (NASDAQ:HELE).
Is Helen of Troy Limited (NASDAQ:HELE) a safe stock to buy now? Money managers are in a pessimistic mood. The number of long hedge fund positions dropped by 6 recently. Our calculations also showed that HELE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are seen as worthless, old financial vehicles of yesteryear. While there are over 8000 funds in operation today, We choose to focus on the elite of this group, approximately 750 funds. These investment experts oversee the lion's share of the hedge fund industry's total asset base, and by paying attention to their first-class picks, Insider Monkey has revealed many investment strategies that have historically exceeded the broader indices. Insider Monkey's flagship short hedge fund strategy outpaced 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_26357" align="aligncenter" width="359"]
Ken Fisher of Fisher Asset 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 gander at the key hedge fund action surrounding Helen of Troy Limited (NASDAQ:HELE).
What does smart money think about Helen of Troy Limited (NASDAQ:HELE)?
Heading into the fourth quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -30% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HELE over the last 17 quarters. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Helen of Troy Limited (NASDAQ:HELE), which was worth $98.4 million at the end of the third quarter. On the second spot was Point72 Asset Management which amassed $40 million worth of shares. Arrowstreet Capital, Renaissance Technologies, and Sabrepoint 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 Sabrepoint Capital allocated the biggest weight to Helen of Troy Limited (NASDAQ:HELE), around 3.52% of its 13F portfolio. Cerebellum Capital is also relatively very bullish on the stock, earmarking 0.3 percent of its 13F equity portfolio to HELE.
Because Helen of Troy Limited (NASDAQ:HELE) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of money managers who were dropping their full holdings by the end of the third quarter. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management dumped the largest stake of the 750 funds watched by Insider Monkey, valued at an estimated $2.5 million in stock, and Matthew Tewksbury's Stevens Capital Management was right behind this move, as the fund said goodbye to about $2.3 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 6 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks similar to Helen of Troy Limited (NASDAQ:HELE). We will take a look at Repligen Corporation (NASDAQ:RGEN), FirstCash, Inc. (NASDAQ:FCFS), Mattel, Inc. (NASDAQ:MAT), and Sinclair Broadcast Group, Inc. (NASDAQ:SBGI). All of these stocks' market caps match HELE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RGEN,23,223018,1 FCFS,16,179303,1 MAT,22,685143,6 SBGI,29,467906,-7 Average,22.5,388843,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $389 million. That figure was $207 million in HELE's case. Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) is the most popular stock in this table. On the other hand FirstCash, Inc. (NASDAQ:FCFS) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Helen of Troy Limited (NASDAQ:HELE) is even less popular than FCFS. Hedge funds dodged a bullet by taking a bearish stance towards HELE. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HELE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); HELE investors were disappointed as the stock returned 2.4% during the fourth quarter (through the end of November) 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 so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
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