The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Standex Int'l Corp. (NYSE:SXI).
Is Standex Int'l Corp. (NYSE:SXI) a bargain? The smart money is becoming less hopeful. The number of long hedge fund positions went down by 4 in recent months. Our calculations also showed that SXI isn't among the 30 most popular stocks among hedge funds.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a peek at the fresh hedge fund action encompassing Standex Int'l Corp. (NYSE:SXI).
What does the smart money think about Standex Int'l Corp. (NYSE:SXI)?
Heading into the first quarter of 2019, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in SXI over the last 14 quarters. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
The largest stake in Standex Int'l Corp. (NYSE:SXI) was held by GAMCO Investors, which reported holding $4.3 million worth of stock at the end of December. It was followed by Millennium Management with a $4 million position. Other investors bullish on the company included Royce & Associates, AQR Capital Management, and Two Sigma Advisors.
Judging by the fact that Standex Int'l Corp. (NYSE:SXI) has experienced falling interest from the smart money, it's easy to see that there was a specific group of money managers that decided to sell off their positions entirely last quarter. Intriguingly, Jim Simons's Renaissance Technologies cut the largest stake of the "upper crust" of funds watched by Insider Monkey, comprising about $1.8 million in stock, and C. Jonathan Gattman's Cloverdale Capital Management was right behind this move, as the fund said goodbye to about $1.6 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Standex Int'l Corp. (NYSE:SXI). We will take a look at Intersect ENT Inc (NASDAQ:XENT), Methode Electronics Inc. (NYSE:MEI), Despegar.com, Corp. (NYSE:DESP), and CTS Corporation (NYSE:CTS). This group of stocks' market values are similar to SXI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XENT,20,214979,-2 MEI,7,68643,-4 DESP,19,199969,6 CTS,12,86244,2 Average,14.5,142459,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $14 million in SXI's case. Intersect ENT Inc (NASDAQ:XENT) is the most popular stock in this table. On the other hand Methode Electronics Inc. (NYSE:MEI) is the least popular one with only 7 bullish hedge fund positions. Standex Int'l Corp. (NYSE:SXI) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately SXI wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); SXI investors were disappointed as the stock returned 11% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.