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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Escalade, Inc. (NASDAQ:ESCA) based on that data.
Escalade, Inc. (NASDAQ:ESCA) shareholders have witnessed a decrease in support from the world's most elite money managers lately. Escalade, Inc. (NASDAQ:ESCA) was in 3 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 9. Our calculations also showed that ESCA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we're going to view the new hedge fund action surrounding Escalade, Inc. (NASDAQ:ESCA).
Do Hedge Funds Think ESCA Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -50% from the fourth quarter of 2020. On the other hand, there were a total of 3 hedge funds with a bullish position in ESCA a year ago. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Among these funds, Minerva Advisors held the most valuable stake in Escalade, Inc. (NASDAQ:ESCA), which was worth $7.7 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $1.2 million worth of shares. Arrowstreet Capital was 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 Minerva Advisors allocated the biggest weight to Escalade, Inc. (NASDAQ:ESCA), around 4.21% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.0015 percent of its 13F equity portfolio to ESCA.
Judging by the fact that Escalade, Inc. (NASDAQ:ESCA) has experienced a decline in interest from the smart money, it's safe to say that there were a few hedgies who were dropping their positions entirely last quarter. At the top of the heap, Mark Broach's Manatuck Hill Partners cut the biggest position of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $1.1 million in stock, and Josh Goldberg's G2 Investment Partners Management was right behind this move, as the fund dropped about $0.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Escalade, Inc. (NASDAQ:ESCA) but similarly valued. These stocks are Bluegreen Vacations Holding Corporation (NYSE:BVH), Trevena Inc (NASDAQ:TRVN), Mayville Engineering Company, Inc. (NYSE:MEC), Immersion Corporation (NASDAQ:IMMR), NavSight Holdings, Inc. (NYSE:NSH), First Choice Bancorp (NASDAQ:FCBP), and Progenity, Inc. (NASDAQ:PROG). All of these stocks' market caps match ESCA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BVH,6,29254,0 TRVN,14,8402,7 MEC,3,3530,0 IMMR,20,71443,0 NSH,21,110081,1 FCBP,4,3484,1 PROG,9,17814,0 Average,11,34858,1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $10 million in ESCA's case. NavSight Holdings, Inc. (NYSE:NSH) is the most popular stock in this table. On the other hand Mayville Engineering Company, Inc. (NYSE:MEC) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Escalade, Inc. (NASDAQ:ESCA) is even less popular than MEC. Our overall hedge fund sentiment score for ESCA is 12. 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. Hedge funds clearly dropped the ball on ESCA as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on ESCA as the stock returned 15% since Q1 (through June 11th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.