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 have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Spire Inc. (NYSE:SR) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Spire Inc. (NYSE:SR) investors should pay attention to an increase in support from the world's most elite money managers of late. SR was in 15 hedge funds' portfolios at the end of the first quarter of 2019. There were 13 hedge funds in our database with SR positions at the end of the previous quarter. Our calculations also showed that SR isn't among the 30 most popular stocks among hedge funds.
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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_30621" align="aligncenter" width="487"] Cliff Asness of AQR Capital Management[/caption]
We're going to check out the key hedge fund action encompassing Spire Inc. (NYSE:SR).
Hedge fund activity in Spire Inc. (NYSE:SR)
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in SR a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Spire Inc. (NYSE:SR), which was worth $76.2 million at the end of the first quarter. On the second spot was Millennium Management which amassed $10.4 million worth of shares. Moreover, Shelter Harbor Advisors, AQR Capital Management, and Tudor Investment Corp were also bullish on Spire Inc. (NYSE:SR), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the largest position in Spire Inc. (NYSE:SR). Millennium Management had $10.4 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also made a $1.9 million investment in the stock during the quarter. The other funds with brand new SR positions are Matthew Tewksbury's Stevens Capital Management and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's now review hedge fund activity in other stocks similar to Spire Inc. (NYSE:SR). We will take a look at Performance Food Group Company (NYSE:PFGC), Gates Industrial Corporation plc (NYSE:GTES), Six Flags Entertainment Corp (NYSE:SIX), and CVR Energy, Inc. (NYSE:CVI). This group of stocks' market valuations resemble SR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PFGC,25,192437,7 GTES,9,9016,1 SIX,30,650171,7 CVI,22,3050956,0 Average,21.5,975645,3.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $976 million. That figure was $100 million in SR's case. Six Flags Entertainment Corp (NYSE:SIX) is the most popular stock in this table. On the other hand Gates Industrial Corporation plc (NYSE:GTES) is the least popular one with only 9 bullish hedge fund positions. Spire Inc. (NYSE:SR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SR investors were disappointed as the stock returned 3.7% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.