We at Insider Monkey have gone over 730 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 June 28th. In this article, we look at what those funds think of Sensata Technologies Holding plc (NYSE:ST) based on that data.
Sensata Technologies Holding plc (NYSE:ST) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds' portfolios at the end of June. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as AptarGroup, Inc. (NYSE:ATR), HollyFrontier Corporation (NYSE:HFC), and Alaska Air Group, Inc. (NYSE:ALK) to gather more data points. Our calculations also showed that ST isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 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.
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to view the fresh hedge fund action surrounding Sensata Technologies Holding plc (NYSE:ST).
Hedge fund activity in Sensata Technologies Holding plc (NYSE:ST)
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2019. By comparison, 29 hedge funds held shares or bullish call options in ST a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Generation Investment Management was the largest shareholder of Sensata Technologies Holding N.V. (NYSE:ST), with a stake worth $572 million reported as of the end of March. Trailing Generation Investment Management was Cantillon Capital Management, which amassed a stake valued at $217.8 million. Diamond Hill Capital, Gates Capital Management, and Impax Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Sensata Technologies Holding plc (NYSE:ST) has experienced bearish sentiment from the smart money, it's easy to see that there were a few funds who were dropping their full holdings heading into Q3. It's worth mentioning that Lou Simpson's SQ Advisors said goodbye to the largest position of all the hedgies followed by Insider Monkey, comprising an estimated $74.8 million in stock. Ken Griffin's fund, Citadel Investment Group, also sold off its stock, about $5.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks similar to Sensata Technologies Holding plc (NYSE:ST). We will take a look at AptarGroup, Inc. (NYSE:ATR), HollyFrontier Corporation (NYSE:HFC), Alaska Air Group, Inc. (NYSE:ALK), and Zayo Group Holdings Inc (NYSE:ZAYO). This group of stocks' market valuations resemble ST's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATR,20,95998,5 HFC,25,596896,0 ALK,22,559529,2 ZAYO,59,1893644,-2 Average,31.5,786517,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $787 million. That figure was $1181 million in ST's case. Zayo Group Holdings Inc (NYSE:ZAYO) is the most popular stock in this table. On the other hand AptarGroup, Inc. (NYSE:ATR) is the least popular one with only 20 bullish hedge fund positions. Sensata Technologies Holding plc (NYSE:ST) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on ST, though not to the same extent, as the stock returned 2.2% during the third quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.