The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Steelcase Inc. (NYSE:SCS) based on those filings.
Steelcase Inc. (NYSE:SCS) was in 19 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 30. SCS has seen an increase in hedge fund sentiment lately. There were 17 hedge funds in our database with SCS positions at the end of the fourth quarter. Our calculations also showed that SCS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
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Do Hedge Funds Think SCS Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from the previous quarter. On the other hand, there were a total of 23 hedge funds with a bullish position in SCS 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.
When looking at the institutional investors followed by Insider Monkey, Pzena Investment Management, managed by Richard S. Pzena, holds the biggest position in Steelcase Inc. (NYSE:SCS). Pzena Investment Management has a $83.8 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding a $12.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers with similar optimism comprise Chuck Royce's Royce & Associates, D. E. Shaw's D E Shaw and Paul Marshall and Ian Wace's Marshall Wace LLP. In terms of the portfolio weights assigned to each position Pzena Investment Management allocated the biggest weight to Steelcase Inc. (NYSE:SCS), around 0.34% of its 13F portfolio. Arjuna Capital is also relatively very bullish on the stock, designating 0.12 percent of its 13F equity portfolio to SCS.
As aggregate interest increased, some big names have jumped into Steelcase Inc. (NYSE:SCS) headfirst. Royce & Associates, managed by Chuck Royce, created the biggest position in Steelcase Inc. (NYSE:SCS). Royce & Associates had $12 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also made a $1.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Muller's PDT Partners, Michael Gelband's ExodusPoint Capital, and Ken Griffin's Citadel Investment Group.
Let's check out hedge fund activity in other stocks similar to Steelcase Inc. (NYSE:SCS). We will take a look at Northwest Natural Holding Company (NYSE:NWN), ICF International Inc (NASDAQ:ICFI), Aluminum Corp. of China Limited (NYSE:ACH), Stratasys, Ltd. (NASDAQ:SSYS), Kronos Bio, Inc. (NASDAQ:KRON), Acadia Realty Trust (NYSE:AKR), and LTC Properties Inc (NYSE:LTC). This group of stocks' market valuations resemble SCS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NWN,10,28380,0 ICFI,12,28041,-1 ACH,3,7519,-1 SSYS,24,481918,8 KRON,16,225983,-3 AKR,8,22188,-1 LTC,7,6702,-1 Average,11.4,114390,0.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $127 million in SCS's case. Stratasys, Ltd. (NASDAQ:SSYS) is the most popular stock in this table. On the other hand Aluminum Corp. of China Limited (NYSE:ACH) is the least popular one with only 3 bullish hedge fund positions. Steelcase Inc. (NYSE:SCS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SCS is 64.1. 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 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 gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately SCS wasn't nearly as popular as these 5 stocks and hedge funds that were betting on SCS were disappointed as the stock returned -1.7% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.