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 nVent Electric plc (NYSE:NVT)?
Is nVent Electric plc (NYSE:NVT) a healthy stock for your portfolio? The smart money is taking a bullish view. The number of bullish hedge fund positions inched up by 1 recently. Our calculations also showed that NVT 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_30574" align="aligncenter" width="400"] Nelson Peltz of Trian Partners[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a gander at the recent hedge fund action encompassing nVent Electric plc (NYSE:NVT).
How are hedge funds trading nVent Electric plc (NYSE:NVT)?
At Q1's end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. On the other hand, there were a total of 25 hedge funds with a bullish position in NVT a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in nVent Electric plc (NYSE:NVT) was held by Trian Partners, which reported holding $228.7 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $68.4 million position. Other investors bullish on the company included Adage Capital Management, TOMS Capital, and AQR Capital Management. In terms of the portfolio weights assigned to each position Trian Partners allocated the biggest weight to nVent Electric plc (NYSE:NVT), around 3.3% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, earmarking 0.99 percent of its 13F equity portfolio to NVT.
As one would reasonably expect, key hedge funds were breaking ground themselves. Carlson Capital, managed by Clint Carlson, established the most valuable position in nVent Electric plc (NYSE:NVT). Carlson Capital had $3 million invested in the company at the end of the quarter. Joseph Samuels's Islet Management also initiated a $2.5 million position during the quarter. The other funds with brand new NVT positions are Greg Eisner's Engineers Gate Manager, Joel Greenblatt's Gotham Asset Management, and Paul Marshall and Ian Wace's Marshall Wace LLP.
Let's now take a look at hedge fund activity in other stocks similar to nVent Electric plc (NYSE:NVT). These stocks are Q2 Holdings Inc (NYSE:QTWO), UniFirst Corp (NYSE:UNF), Watts Water Technologies Inc (NYSE:WTS), and Avista Corp (NYSE:AVA). All of these stocks' market caps are similar to NVT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position QTWO,18,217845,-2 UNF,17,75902,-4 WTS,19,237163,0 AVA,18,145437,3 Average,18,169087,-0.75 [/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 $169 million. That figure was $454 million in NVT's case. Watts Water Technologies Inc (NYSE:WTS) is the most popular stock in this table. On the other hand UniFirst Corp (NYSE:UNF) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks nVent Electric plc (NYSE:NVT) is more popular among hedge funds. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately NVT wasn't nearly as popular as these 10 stocks and hedge funds that were betting on NVT were disappointed as the stock returned 9.8% during the second quarter (through the end of May) 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.