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Hedge Funds Are Selling EnLink Midstream LLC (ENLC)

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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 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of June 30th, 2021. In this article we are going to take a look at smart money sentiment towards EnLink Midstream LLC (NYSE:ENLC).

EnLink Midstream LLC (NYSE:ENLC) investors should be aware of a decrease in hedge fund interest lately. EnLink Midstream LLC (NYSE:ENLC) was in 10 hedge funds' portfolios at the end of June. The all time high for this statistic is 15. Our calculations also showed that ENLC isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the eyes of most traders, hedge funds are perceived as worthless, outdated investment tools of yesteryear. While there are greater than 8000 funds trading today, Our researchers look at the bigwigs of this club, about 850 funds. Most estimates calculate that this group of people shepherd bulk of the hedge fund industry's total capital, and by paying attention to their finest picks, Insider Monkey has discovered a number of investment strategies that have historically surpassed the broader indices. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .

John Overdeck of Two Sigma
John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

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. With all of this in mind let's take a gander at the latest hedge fund action encompassing EnLink Midstream LLC (NYSE:ENLC).

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

At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ENLC over the last 24 quarters. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Among these funds, Arrowstreet Capital held the most valuable stake in EnLink Midstream LLC (NYSE:ENLC), which was worth $19.9 million at the end of the second quarter. On the second spot was Two Sigma Advisors which amassed $11.5 million worth of shares. Citadel Investment Group, Renaissance Technologies, and Engineers Gate Manager 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 Engineers Gate Manager allocated the biggest weight to EnLink Midstream LLC (NYSE:ENLC), around 0.08% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to ENLC.

Because EnLink Midstream LLC (NYSE:ENLC) has experienced declining sentiment from hedge fund managers, logic holds that there were a few funds who sold off their full holdings heading into Q3. It's worth mentioning that Dmitry Balyasny's Balyasny Asset Management dumped the largest stake of all the hedgies followed by Insider Monkey, valued at an estimated $3.6 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund dumped about $0.4 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q3.

Let's now review hedge fund activity in other stocks similar to EnLink Midstream LLC (NYSE:ENLC). We will take a look at Associated Banc Corp (NYSE:ASB), Nektar Therapeutics (NASDAQ:NKTR), MakeMyTrip Limited (NASDAQ:MMYT), United States Cellular Corporation (NYSE:USM), SEMrush Holdings, Inc. (NYSE:SEMR), Marathon Digital Holdings, Inc. (NASDAQ:MARA), and Cannae Holdings, Inc. (NYSE:CNNE). This group of stocks' market caps are similar to ENLC's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ASB,18,168185,-6 NKTR,21,234388,3 MMYT,9,47845,0 USM,8,91762,-2 SEMR,7,111387,-13 MARA,19,108824,9 CNNE,34,522342,-2 Average,16.6,183533,-1.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $46 million in ENLC's case. Cannae Holdings, Inc. (NYSE:CNNE) is the most popular stock in this table. On the other hand SEMrush Holdings, Inc. (NYSE:SEMR) is the least popular one with only 7 bullish hedge fund positions. EnLink Midstream LLC (NYSE:ENLC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ENLC is 29.6. 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 gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on ENLC as the stock returned 13.3% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.

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