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 December. At Insider Monkey, we follow nearly 750 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 Enviva Partners, LP (NYSE:EVA), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
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. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's go over the key hedge fund action encompassing Enviva Partners, LP (NYSE:EVA).
Hedge fund activity in Enviva Partners, LP (NYSE:EVA)
Heading into the first quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. By comparison, 4 hedge funds held shares or bullish call options in EVA a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, ValueAct Capital held the most valuable stake in Enviva Partners, LP (NYSE:EVA), which was worth $20.1 million at the end of the fourth quarter. On the second spot was Ardsley Partners which amassed $16.3 million worth of shares. Moreover, McKinley Capital Management, Becker Drapkin Management, and PEAK6 Capital Management were also bullish on Enviva Partners, LP (NYSE:EVA), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Enviva Partners, LP (NYSE:EVA) headfirst. Becker Drapkin Management, managed by Matthew Drapkin and Steven R. Becker, established the biggest position in Enviva Partners, LP (NYSE:EVA). Becker Drapkin Management had $1.3 million invested in the company at the end of the quarter.
Let's also examine hedge fund activity in other stocks similar to Enviva Partners, LP (NYSE:EVA). These stocks are CorePoint Lodging Inc. (NYSE:CPLG), Movado Group, Inc (NYSE:MOV), Falcon Minerals Corporation (NASDAQ:FLMN), and H&E Equipment Services, Inc. (NASDAQ:HEES). This group of stocks' market caps are closest to EVA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CPLG,16,94089,-7 MOV,23,64412,-2 FLMN,18,187846,1 HEES,15,36756,2 Average,18,95776,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $40 million in EVA's case. Movado Group, Inc (NYSE:MOV) is the most popular stock in this table. On the other hand H&E Equipment Services, Inc. (NASDAQ:HEES) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Enviva Partners, LP (NYSE:EVA) is even less popular than HEES. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on EVA, though not to the same extent, as the stock returned 20.8% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.