The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought EnerSys (NYSE:ENS) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
EnerSys (NYSE:ENS) was in 26 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. ENS has experienced an increase in hedge fund sentiment recently. There were 16 hedge funds in our database with ENS positions at the end of the first quarter. Our calculations also showed that ENS isn't among the 30 most popular stocks among hedge funds (click for Q2 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.
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Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now we're going to take a glance at the fresh hedge fund action encompassing EnerSys (NYSE:ENS).
What have hedge funds been doing with EnerSys (NYSE:ENS)?
Heading into the third quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 63% from the first quarter of 2020. By comparison, 16 hedge funds held shares or bullish call options in ENS a year ago. With the smart money's capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in EnerSys (NYSE:ENS) was held by Encompass Capital Advisors, which reported holding $19 million worth of stock at the end of September. It was followed by ACK Asset Management with a $18.2 million position. Other investors bullish on the company included Intrinsic Edge Capital, One Fin Capital Management, and Skylands Capital. In terms of the portfolio weights assigned to each position One Fin Capital Management allocated the biggest weight to EnerSys (NYSE:ENS), around 9.33% of its 13F portfolio. ACK Asset Management is also relatively very bullish on the stock, dishing out 8.25 percent of its 13F equity portfolio to ENS.
As aggregate interest increased, key money managers were breaking ground themselves. Intrinsic Edge Capital, managed by Mark Coe, initiated the most outsized position in EnerSys (NYSE:ENS). Intrinsic Edge Capital had $15.5 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors also made a $6.1 million investment in the stock during the quarter. The other funds with brand new ENS positions are Renaissance Technologies, Paul Marshall and Ian Wace's Marshall Wace LLP, and Dmitry Balyasny's Balyasny Asset Management.
Let's now take a look at hedge fund activity in other stocks similar to EnerSys (NYSE:ENS). We will take a look at Watts Water Technologies Inc (NYSE:WTS), LiveRamp Holdings, Inc. (NYSE:RAMP), Plug Power, Inc. (NASDAQ:PLUG), John Bean Technologies Corporation (NYSE:JBT), Advanced Disposal Services, Inc. (NYSE:ADSW), BlackBerry Limited (NYSE:BB), and FireEye Inc (NASDAQ:FEYE). This group of stocks' market valuations resemble ENS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WTS,25,250368,6 RAMP,25,180604,9 PLUG,20,271588,5 JBT,16,93148,4 ADSW,25,719995,4 BB,22,347261,0 FEYE,28,256703,-4 Average,23,302810,3.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $303 million. That figure was $109 million in ENS's case. FireEye Inc (NASDAQ:FEYE) is the most popular stock in this table. On the other hand John Bean Technologies Corporation (NYSE:JBT) is the least popular one with only 16 bullish hedge fund positions. EnerSys (NYSE:ENS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ENS is 81.7. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately ENS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on ENS were disappointed as the stock returned -0.5% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.