We at Insider Monkey have gone over 738 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article, we look at what those funds think of Hewlett Packard Enterprise Company (NYSE:HPE) based on that data.
Hewlett Packard Enterprise Company (NYSE:HPE) investors should be aware of an increase in hedge fund sentiment recently. HPE was in 30 hedge funds' portfolios at the end of March. There were 29 hedge funds in our database with HPE positions at the end of the previous quarter. Our calculations also showed that hpe isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? 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.
We're going to take a look at the new hedge fund action encompassing Hewlett Packard Enterprise Company (NYSE:HPE).
What have hedge funds been doing with Hewlett Packard Enterprise Company (NYSE:HPE)?
Heading into the second quarter of 2019, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HPE over the last 15 quarters. With the smart money's sentiment swirling, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Pzena Investment Management held the most valuable stake in Hewlett Packard Enterprise Company (NYSE:HPE), which was worth $520.1 million at the end of the first quarter. On the second spot was Citadel Investment Group which amassed $108.8 million worth of shares. Moreover, Arrowstreet Capital, GAMCO Investors, and Two Sigma Advisors were also bullish on Hewlett Packard Enterprise Company (NYSE:HPE), allocating a large percentage of their portfolios to this stock.
Now, key money managers were leading the bulls' herd. Alyeska Investment Group, managed by Anand Parekh, initiated the largest position in Hewlett Packard Enterprise Company (NYSE:HPE). Alyeska Investment Group had $13 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also made a $12.4 million investment in the stock during the quarter. The following funds were also among the new HPE investors: Matthew Tewksbury's Stevens Capital Management, Steve Cohen's Point72 Asset Management, and Michael Gelband's ExodusPoint Capital.
Let's now take a look at hedge fund activity in other stocks similar to Hewlett Packard Enterprise Company (NYSE:HPE). These stocks are Rockwell Automation Inc. (NYSE:ROK), Boston Properties, Inc. (NYSE:BXP), Ulta Beauty, Inc. (NASDAQ:ULTA), and Stanley Black & Decker, Inc. (NYSE:SWK). All of these stocks' market caps resemble HPE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ROK,28,534625,-7 BXP,27,572101,10 ULTA,43,994415,1 SWK,31,1033655,-4 Average,32.25,783699,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.25 hedge funds with bullish positions and the average amount invested in these stocks was $784 million. That figure was $967 million in HPE's case. Ulta Beauty, Inc. (NASDAQ:ULTA) is the most popular stock in this table. On the other hand Boston Properties, Inc. (NYSE:BXP) is the least popular one with only 27 bullish hedge fund positions. Hewlett Packard Enterprise Company (NYSE:HPE) 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 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately HPE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HPE investors were disappointed as the stock returned -7.8% 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.