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Hedge Funds Are Dumping Ashland Global Holdings Inc.. (ASH)

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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Ashland Global Holdings Inc.. (NYSE:ASH), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Ashland Global Holdings Inc.. (NYSE:ASH) investors should be aware of a decrease in hedge fund sentiment of late. Ashland Global Holdings Inc.. (NYSE:ASH) was in 28 hedge funds' portfolios at the end of June. The all time high for this statistic is 46. There were 36 hedge funds in our database with ASH holdings at the end of March. Our calculations also showed that ASH isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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Do Hedge Funds Think ASH Is A Good Stock To Buy Now?

At the end of June, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from the first quarter of 2020. By comparison, 32 hedge funds held shares or bullish call options in ASH a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Is ASH A Good Stock To Buy?
Is ASH A Good Stock To Buy?

The largest stake in Ashland Global Holdings Inc.. (NYSE:ASH) was held by Eminence Capital, which reported holding $353.1 million worth of stock at the end of June. It was followed by Diamond Hill Capital with a $120.8 million position. Other investors bullish on the company included Empyrean Capital Partners, Omega Advisors, and Cardinal Capital. In terms of the portfolio weights assigned to each position Cruiser Capital Advisors allocated the biggest weight to Ashland Global Holdings Inc.. (NYSE:ASH), around 43.67% of its 13F portfolio. Luminus Management is also relatively very bullish on the stock, setting aside 6.24 percent of its 13F equity portfolio to ASH.

Due to the fact that Ashland Global Holdings Inc.. (NYSE:ASH) has experienced falling interest from hedge fund managers, it's safe to say that there lies a certain "tier" of fund managers who sold off their positions entirely in the second quarter. At the top of the heap, David Cohen and Harold Levy's Iridian Asset Management said goodbye to the largest stake of the 750 funds watched by Insider Monkey, valued at close to $68 million in stock. Javier Velazquez's fund, Albar Capital, also sold off its stock, about $34.3 million worth. These transactions are interesting, as total hedge fund interest dropped by 8 funds in the second quarter.

Let's now take a look at hedge fund activity in other stocks similar to Ashland Global Holdings Inc.. (NYSE:ASH). We will take a look at Enstar Group Ltd. (NASDAQ:ESGR), QTS Realty Trust Inc (NYSE:QTS), Gates Industrial Corporation plc (NYSE:GTES), Glacier Bancorp, Inc. (NASDAQ:GBCI), Inspire Medical Systems, Inc. (NYSE:INSP), Flowserve Corporation (NYSE:FLS), and Allegro MicroSystems, Inc. (NASDAQ:ALGM). This group of stocks' market values resemble ASH's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ESGR,11,495727,0 QTS,39,1285562,17 GTES,19,89195,1 GBCI,11,51205,-5 INSP,32,544165,4 FLS,27,234192,-2 ALGM,17,74844,0 Average,22.3,396413,2.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $396 million. That figure was $933 million in ASH's case. QTS Realty Trust Inc (NYSE:QTS) is the most popular stock in this table. On the other hand Enstar Group Ltd. (NASDAQ:ESGR) is the least popular one with only 11 bullish hedge fund positions. Ashland Global Holdings Inc.. (NYSE:ASH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ASH is 45.6. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on ASH as the stock returned 9.8% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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