Here is What Hedge Funds Think About Edgewell Personal Care Company (EPC)
In this article you are going to find out whether hedge funds think Edgewell Personal Care Company (NYSE:EPC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Edgewell Personal Care Company (NYSE:EPC) has seen a decrease in hedge fund interest recently. EPC was in 25 hedge funds' portfolios at the end of the first quarter of 2020. There were 26 hedge funds in our database with EPC holdings at the end of the previous quarter. Our calculations also showed that EPC 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.
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 58 percentage points since March 2017 (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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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Dmitry Balyasny of Balyasny Asset Management[/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. Now let's go over the key hedge fund action regarding Edgewell Personal Care Company (NYSE:EPC).
Hedge fund activity in Edgewell Personal Care Company (NYSE:EPC)
Heading into the second quarter of 2020, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EPC over the last 18 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Mario Gabelli's GAMCO Investors has the number one position in Edgewell Personal Care Company (NYSE:EPC), worth close to $58.5 million, corresponding to 0.7% of its total 13F portfolio. On GAMCO Investors's heels is Tremblant Capital, managed by Brett Barakett, which holds a $33.9 million position; 2.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish contain Steven Boyd's Armistice Capital, Jack Woodruff's Candlestick Capital Management and Steven Boyd's Armistice Capital. In terms of the portfolio weights assigned to each position Clearline Capital allocated the biggest weight to Edgewell Personal Care Company (NYSE:EPC), around 4.76% of its 13F portfolio. Tremblant Capital is also relatively very bullish on the stock, designating 2.13 percent of its 13F equity portfolio to EPC.
Judging by the fact that Edgewell Personal Care Company (NYSE:EPC) has witnessed falling interest from hedge fund managers, it's easy to see that there exists a select few hedgies who were dropping their full holdings heading into Q4. Interestingly, George Soros's Soros Fund Management sold off the largest stake of all the hedgies monitored by Insider Monkey, valued at close to $31.9 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund dumped about $7.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into Q4.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Edgewell Personal Care Company (NYSE:EPC) but similarly valued. These stocks are BioTelemetry, Inc. (NASDAQ:BEAT), Office Properties Income Trust (NASDAQ:OPI), Constellation Pharmaceuticals, Inc. (NASDAQ:CNST), and RLJ Lodging Trust (NYSE:RLJ). This group of stocks' market caps are closest to EPC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BEAT,12,42629,-3 OPI,10,20479,1 CNST,25,427184,-2 RLJ,20,55694,3 Average,16.75,136497,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $177 million in EPC's case. Constellation Pharmaceuticals, Inc. (NASDAQ:CNST) is the most popular stock in this table. On the other hand Office Properties Income Trust (NASDAQ:OPI) is the least popular one with only 10 bullish hedge fund positions. Edgewell Personal Care Company (NYSE:EPC) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on EPC, though not to the same extent, as the stock returned 24.8% during the first two months and ten days of the second quarter and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
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