- Oops!Something went wrong.Please try again later.
Is Enbridge Inc (NYSE:ENB) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Enbridge Inc (NYSE:ENB) investors should be aware of a decrease in hedge fund interest of late. Enbridge Inc (NYSE:ENB) was in 22 hedge funds' portfolios at the end of March. The all time high for this statistic is 28. Our calculations also showed that ENB isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. Keeping this in mind let's check out the fresh hedge fund action encompassing Enbridge Inc (NYSE:ENB).
Do Hedge Funds Think ENB Is A Good Stock To Buy Now?
At Q1's end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -21% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ENB over the last 23 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Enbridge Inc (NYSE:ENB) was held by Marshall Wace LLP, which reported holding $46.3 million worth of stock at the end of December. It was followed by Galibier Capital Management with a $28 million position. Other investors bullish on the company included Citadel Investment Group, Schonfeld Strategic Advisors, and Fairholme (FAIRX). In terms of the portfolio weights assigned to each position Heronetta Management allocated the biggest weight to Enbridge Inc (NYSE:ENB), around 5.72% of its 13F portfolio. Galibier Capital Management is also relatively very bullish on the stock, dishing out 4.2 percent of its 13F equity portfolio to ENB.
Due to the fact that Enbridge Inc (NYSE:ENB) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there exists a select few hedge funds who were dropping their positions entirely in the first quarter. It's worth mentioning that Brad Dunkley and Blair Levinsky's Waratah Capital Advisors cut the biggest stake of the "upper crust" of funds monitored by Insider Monkey, valued at about $4.1 million in stock. Peter Simmie's fund, Bristol Gate Capital Partners, also cut its stock, about $1.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds in the first quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Enbridge Inc (NYSE:ENB) but similarly valued. We will take a look at Mercadolibre Inc (NASDAQ:MELI), CME Group Inc (NASDAQ:CME), CSX Corporation (NYSE:CSX), Baidu, Inc. (NASDAQ:BIDU), Activision Blizzard, Inc. (NASDAQ:ATVI), ConocoPhillips (NYSE:COP), and NetEase, Inc (NASDAQ:NTES). This group of stocks' market caps match ENB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MELI,69,5223036,-10 CME,60,2399257,2 CSX,53,3699622,-5 BIDU,89,6572291,38 ATVI,76,3580901,-5 COP,51,1205455,2 NTES,32,3501491,-6 Average,61.4,3740293,2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 61.4 hedge funds with bullish positions and the average amount invested in these stocks was $3740 million. That figure was $145 million in ENB's case. Baidu, Inc. (NASDAQ:BIDU) is the most popular stock in this table. On the other hand NetEase, Inc (NASDAQ:NTES) is the least popular one with only 32 bullish hedge fund positions. Compared to these stocks Enbridge Inc (NYSE:ENB) is even less popular than NTES. Our overall hedge fund sentiment score for ENB is 22.6. 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 23.8% in 2021 through July 16th but managed to beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on ENB, though not to the same extent, as the stock returned 9.2% since the end of March (through July 16th) and outperformed the market as well.
Get real-time email alerts: Follow Enbridge Inc (NYSE:ENB)
Disclosure: None. This article was originally published at Insider Monkey.