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Hedge Funds Have Never Been This Bullish On South Jersey Industries Inc (SJI)

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. We at Insider Monkey have plowed through 866 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 March 31st. In this article we look at what those investors think of South Jersey Industries Inc (NYSE:SJI).

South Jersey Industries Inc (NYSE:SJI) shareholders have witnessed an increase in hedge fund sentiment in recent months. South Jersey Industries Inc (NYSE:SJI) was in 32 hedge funds' portfolios at the end of March. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SJI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Stuart Zimmer Zimmer Partners
Stuart Zimmer Zimmer Partners

Stuart Zimmer of Zimmer Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 let's take a peek at the recent hedge fund action regarding South Jersey Industries Inc (NYSE:SJI).

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

Heading into the second quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 167% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SJI over the last 23 quarters. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Among these funds, Diamond Hill Capital held the most valuable stake in South Jersey Industries Inc (NYSE:SJI), which was worth $72.2 million at the end of the fourth quarter. On the second spot was Zimmer Partners which amassed $51 million worth of shares. Point72 Asset Management, Weiss Asset Management, and Millennium Management 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 Coann Capital allocated the biggest weight to South Jersey Industries Inc (NYSE:SJI), around 3.6% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, dishing out 1.53 percent of its 13F equity portfolio to SJI.

Consequently, some big names were leading the bulls' herd. Zimmer Partners, managed by Stuart J. Zimmer, initiated the largest position in South Jersey Industries Inc (NYSE:SJI). Zimmer Partners had $51 million invested in the company at the end of the quarter. Andrew Weiss's Weiss Asset Management also made a $45 million investment in the stock during the quarter. The following funds were also among the new SJI investors: Israel Englander's Millennium Management, D. E. Shaw's D E Shaw, and Phill Gross and Robert Atchinson's Adage Capital Management.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as South Jersey Industries Inc (NYSE:SJI) but similarly valued. These stocks are Nuvation Bio Inc. (NYSE:NUVB), Sally Beauty Holdings, Inc. (NYSE:SBH), Globalstar, Inc. (NYSE:GSAT), Strategic Education Inc (NASDAQ:STRA), BTRS Holdings Inc. (NASDAQ:BTRS), Bionano Genomics, Inc. (NASDAQ:BNGO), and Morphic Holding, Inc. (NASDAQ:MORF). This group of stocks' market values are closest to SJI's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NUVB,30,543947,30 SBH,19,127433,-4 GSAT,10,163384,1 STRA,16,232233,1 BTRS,26,310999,26 BNGO,10,108374,5 MORF,22,425543,7 Average,19,273130,9.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $273 million. That figure was $482 million in SJI's case. Nuvation Bio Inc. (NYSE:NUVB) is the most popular stock in this table. On the other hand Globalstar, Inc. (NYSE:GSAT) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks South Jersey Industries Inc (NYSE:SJI) is more popular among hedge funds. Our overall hedge fund sentiment score for SJI is 90. 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 returned 22.8% in 2021 through July 2nd but still managed to beat the market by 6 percentage points. Hedge funds were also right about betting on SJI as the stock returned 17.7% since the end of March (through 7/2) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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