The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Sasol Limited (NYSE:SSL)?
Is Sasol Limited (NYSE:SSL) a buy here? The smart money is buying. The number of bullish hedge fund positions rose by 2 lately. Our calculations also showed that SSL isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are tons of methods stock market investors put to use to appraise publicly traded companies. A couple of the most innovative methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top money managers can trounce the S&P 500 by a solid amount (see the details here).
[caption id="attachment_673876" align="aligncenter" width="400"] John Overdeck of Two Sigma Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to view the recent hedge fund action surrounding Sasol Limited (NYSE:SSL).
Hedge fund activity in Sasol Limited (NYSE:SSL)
Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from the fourth quarter of 2019. On the other hand, there were a total of 5 hedge funds with a bullish position in SSL a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Sasol Limited (NYSE:SSL), which was worth $3.1 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $0.8 million worth of shares. Pzena Investment Management, Two Sigma Advisors, and D E Shaw 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 Engineers Gate Manager allocated the biggest weight to Sasol Limited (NYSE:SSL), around 0.01% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, earmarking 0.0049 percent of its 13F equity portfolio to SSL.
As one would reasonably expect, key hedge funds were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the most outsized position in Sasol Limited (NYSE:SSL). Two Sigma Advisors had $0.2 million invested in the company at the end of the quarter. Donald Sussman's Paloma Partners also made a $0.1 million investment in the stock during the quarter. The other funds with brand new SSL positions are Greg Eisner's Engineers Gate Manager and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Sasol Limited (NYSE:SSL) but similarly valued. We will take a look at Mueller Water Products, Inc. (NYSE:MWA), McGrath RentCorp (NASDAQ:MGRC), Employers Holdings, Inc. (NYSE:EIG), and WSFS Financial Corporation (NASDAQ:WSFS). This group of stocks' market valuations match SSL's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MWA,20,180904,0 MGRC,20,90738,0 EIG,10,52392,-5 WSFS,12,99147,-4 Average,15.5,105795,-2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $5 million in SSL's case. Mueller Water Products, Inc. (NYSE:MWA) is the most popular stock in this table. On the other hand Employers Holdings, Inc. (NYSE:EIG) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Sasol Limited (NYSE:SSL) is even less popular than EIG. Hedge funds clearly dropped the ball on SSL as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on SSL as the stock returned 303.5% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.