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With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was EnPro Industries, Inc. (NYSE:NPO).
Is NPO a good stock to buy now? Prominent investors were buying. The number of bullish hedge fund bets went up by 1 lately. EnPro Industries, Inc. (NYSE:NPO) was in 18 hedge funds' portfolios at the end of September. The all time high for this statistic is 19. Our calculations also showed that NPO isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Chuck Royce of Royce & Associates
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let's take a look at the fresh hedge fund action regarding EnPro Industries, Inc. (NYSE:NPO).
Do Hedge Funds Think NPO Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NPO over the last 21 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in EnPro Industries, Inc. (NYSE:NPO) was held by GAMCO Investors, which reported holding $72.3 million worth of stock at the end of September. It was followed by Paradice Investment Management with a $38.6 million position. Other investors bullish on the company included Birch Run Capital, Arrowstreet Capital, and Royce & Associates. In terms of the portfolio weights assigned to each position Birch Run Capital allocated the biggest weight to EnPro Industries, Inc. (NYSE:NPO), around 5.53% of its 13F portfolio. Paradice Investment Management is also relatively very bullish on the stock, designating 2.79 percent of its 13F equity portfolio to NPO.
As industrywide interest jumped, key hedge funds have jumped into EnPro Industries, Inc. (NYSE:NPO) headfirst. Harvey Partners, managed by Jeffrey Moskowitz, established the most valuable position in EnPro Industries, Inc. (NYSE:NPO). Harvey Partners had $1.1 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also made a $0.5 million investment in the stock during the quarter. The other funds with brand new NPO positions are Donald Sussman's Paloma Partners and Gavin Saitowitz and Cisco J. del Valle's Prelude Capital (previously Springbok Capital).
Let's now review hedge fund activity in other stocks similar to EnPro Industries, Inc. (NYSE:NPO). We will take a look at BEST Inc. (NYSE:BEST), Herc Holdings Inc. (NYSE:HRI), Infinera Corp. (NASDAQ:INFN), Annexon, Inc. (NASDAQ:ANNX), EnLink Midstream LLC (NYSE:ENLC), Opera Limited (NASDAQ:OPRA), and New Gold Inc. (NYSE:NGD). This group of stocks' market valuations match NPO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BEST,8,13537,2 HRI,19,440444,-2 INFN,20,261249,-1 ANNX,11,323562,11 ENLC,9,12533,2 OPRA,4,1682,-1 NGD,12,99810,1 Average,11.9,164688,1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.9 hedge funds with bullish positions and the average amount invested in these stocks was $165 million. That figure was $145 million in NPO's case. Infinera Corp. (NASDAQ:INFN) is the most popular stock in this table. On the other hand Opera Limited (NASDAQ:OPRA) is the least popular one with only 4 bullish hedge fund positions. EnPro Industries, Inc. (NYSE:NPO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NPO is 78.2. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on NPO as the stock returned 29.5% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.