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SpaceX is still in control of all but three of its internet satellites
How are SpaceX'sStarlink internet satellitesfaring roughly a month after launch? Quite well, if you ask SpaceX. The companyreportedthat it's in contact with 57 of the 60 initial broadband satellites. Although it's not certain what happened to those three faulty satellites, they'll eventually fall to Earth as gravity drags them down.
SpaceX also intends to deorbit two of the functioning satellites in order to test the process.
It's still early days for Starlink, but it suggests that you won't see a host of dead satellites clogging up Earth's orbit. The concern is more one of scale. Eventually, SpaceX hopes to put a constellation ofnearly 12,000internet satellites into orbit. There's no guarantee that SpaceX will enjoy similar or better success rates for all of them. A comparable failure rate would still affect hundreds of satellites over time, increasing the risk of persistentspace debris.
Thankfully, the satellites won't last forever. SpaceX already expects the satellites to last five years before they plunge into the atmosphere. It's just a question of how many of those machines make a controlled plunge rather than failing in unpredictable ways.
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How Do Analysts See Luk Fook Holdings (International) Limited (HKG:590) Performing In The Next 12 Months?
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On 31 March 2019, Luk Fook Holdings (International) Limited (HKG:590) announced its earnings update. Overall, analysts seem cautiously optimistic, with profits predicted to increase by 5.2% next year against the past 5-year average growth rate of -4.9%. Presently, with latest-twelve-month earnings at HK$1.5b, we should see this growing to HK$1.6b by 2020. Below is a brief commentary on the longer term outlook the market has for Luk Fook Holdings (International). Investors wanting to learn more about other aspects of the company shouldresearch its fundamentals here.
See our latest analysis for Luk Fook Holdings (International)
The 12 analysts covering 590 view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of 590's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of HK$1.5b and the final forecast of HK$1.8b by 2022, the annual rate of growth for 590’s earnings is 5.9%. This leads to an EPS of HK$2.93 in the final year of projections relative to the current EPS of HK$2.54. In 2022, 590's profit margin will have expanded from 9.4% to 9.8%.
Future outlook is only one aspect when you're building an investment case for a stock. For Luk Fook Holdings (International), I've compiled three pertinent aspects you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Luk Fook Holdings (International) worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether Luk Fook Holdings (International) is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Luk Fook Holdings (International)? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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3 High-Yield Stocks at Rock-Bottom Prices
Interest rates have crept up over the past couple of years, but generally still remain well below historical averages. This has caused plenty of income-seeing investors to take on more risk and buy high-yield stocks over the past decade, hunting for as much yield as they can find. This resulted in sending many top dividend stocks much higher, pushing their yields down as a result -- and leaving dividend investors with fewer reasonably valued stocks to buy.
But that doesn't mean there isn't opportunity to buy high-yield shares today. To the contrary: There are plenty of high-quality dividend-paying stocks to be found, for investors who know where to look. To help you get started, we asked three of our Motley Fool contributors to find a stock with both an above-average yield and a rock-bottom price.
They came back with two stocks that look like great value after recent market sell-offs inBroadcom(NASDAQ: AVGO)andChina Mobile(NYSE: CHL), and one severely beaten-down energy stock that looks like an excellent risk-reward investment inCore Laboratories(NYSE: CLB). All three yield above 3.7% at recent prices, giving investors a solid head start on potential market-beating total returns.
Risk/reward or value? One of three high-yield stocks has what you're looking for. Image source: Getty Images.
Read on to learn why our experts picked these three stocks.
Steve Symington(Broadcom):Shares of Broadcom have been thumped over the past few months, trading around 14% below their April highs and at 12.6 times this year's expected earnings. They were most recently hurt as the semiconductor giant told investors earlier this month toabandon hope for a second-half rebound. The company says the fault lies in the combination of escalating trade tensions between China and the U.S. and, consequently, broader macroeconomic uncertainty reducing visibility for its global OEM customers.
As such, Broadcom lowered its guidance to call for full-year 2019 revenue of $22.5 billion (down about $2 billion from its previous target), and for adjusted net income of $9.35 billion (or $22.15 per share), down from $23.87 before.
But there were still bright spots in its report. Demand for Broadcom's enterprise and mainframe software was solid, free cash flow soared 20% to a company-record $2.5 billion, and the company has pledged to repurchase and retire $8 billion in shares this fiscal year. Couple this with its $2.65-per-share quarterly dividend that now yields around 3.7%, and I think the stock is a great bet for patient investors willing to buy now and wait for Broadcom's eventual recovery.
Leo Sun(China Mobile):China Mobile, the largest wireless carrier in China, serves over 930 million mobile customers and more than 170 million wireline customers. The telco and its two rivals,China TelecomandChina Unicom, are all state-backed enterprises.
All three telcos struggled with three major headwinds over the past year. First, smartphone sales in China tumbled 14% in 2018, according to Canalys, due to longer upgrade cycles and market saturation.
Second, Chinese regulators forced all three telcos to cut their wireless fees, eliminate data roaming charges, and provide faster wireline connections to increase the country's internet penetration rate as it rolled out 5G upgrades. And third, those upgrades caused the telcos' expenses to rise.
The escalating trade war and the Federal Communications Commission's decision to block China Mobile's long-delayed bid to enter the U.S. market kept investors away. Allthose headwindscaused China Mobile to lose more than 10% of its value over the past three months.
But looking closer at China Mobile's core business, things aren't that bleak. Its operating revenue rose 2% last year, and its net profit (buoyed by the IPO of China Tower last year) grew 3%. Its semiannual dividend, which is calculated based on a payout ratio of about 50%, currently tops a 4% yield.
The stock also looks cheap at just 10 times earnings -- compared with China Telecom's and China Unicom's P/E ratios of 16 and 14, respectively. China Mobile probably isn't the ideal income stock for conservative investors, but any positive news about China could light a fire under it.
Jason Hall(Core Laboratories):Like Broadcom, Core Labs is also experiencing a sectorwide downturn caused by things completely out of its control. Also like Broadcom, it's a high-quality company with some very real competitive advantages that should pay off for investors willing to ride out what has proven to be a painful period.
That's where the similarities end. The bottom line is, Core, which provides important oil and gas reservoir analysis services for producers, is in the midst of one of the moststubbornly long downturns in spendingfor its services we've seen in decades. As a result, the share price has lost almost 70% of its value over the past five years, and for the past few months has traded at its lowest levels since the global financial crisis a decade ago:
CLBdata byYCharts
Core's share price has fallen so far that it's pushed the dividend into high-yield territory, 4.2% at recent prices andwellabove the company's historical yield:
CLB Dividend Yield (TTM)data byYCharts.
There's some risk Core may be forced to reduce the payout if its results don't improve. Over the past year, its dividend has exceeded earnings, and when a company's payout ratio gets above 100%, it can be difficult to maintain it.
However, that's a last-resort move by management. On thefirst-quarter earnings call, CEO David Demshur said management had no plans to cut the dividend, and pointed out that free cash flow was higher than the dividend the past two quarters.
Let's be clear: This isn't a risk-free investment, and the dividend isn't 100% in the clear. But Core is a unique tech-focused business in oil and gas that's built to generate free cash flow and return much of it back to investors. If you're willing to take on a little more risk, now is an excellent time to buy the stock and then sit on your hands the next few years.
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Jason Hallowns shares of Core Laboratories.Leo Sunowns shares of China Mobile.Steve Symingtonhas no position in any of the stocks mentioned. The Motley Fool recommends Broadcom Ltd and Core Laboratories. The Motley Fool has adisclosure policy.
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Does Chow Tai Fook Jewellery Group Limited's (HKG:1929) Recent Track Record Look Strong?
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After looking at Chow Tai Fook Jewellery Group Limited's (HKG:1929) latest earnings announcement (31 March 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
See our latest analysis for Chow Tai Fook Jewellery Group
1929's trailing twelve-month earnings (from 31 March 2019) of HK$4.6b has jumped 12% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -11%, indicating the rate at which 1929 is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only a result of industry tailwinds, or if Chow Tai Fook Jewellery Group has seen some company-specific growth.
In terms of returns from investment, Chow Tai Fook Jewellery Group has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 7.7% exceeds the HK Specialty Retail industry of 6.5%, indicating Chow Tai Fook Jewellery Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Chow Tai Fook Jewellery Group’s debt level, has increased over the past 3 years from 11% to 19%.
Though Chow Tai Fook Jewellery Group's past data is helpful, it is only one aspect of my investment thesis. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There could be factors that are affecting the entire industry thus the high industry growth rate over the same period of time. I suggest you continue to research Chow Tai Fook Jewellery Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 1929’s future growth? Take a look at ourfree research report of analyst consensusfor 1929’s outlook.
2. Financial Health: Are 1929’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Hedge Funds Have Never Been More Bullish On Sierra Wireless, Inc. (SWIR)
Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2019. In this article we are going to take a look at smart money sentiment towards Sierra Wireless, Inc. (NASDAQ:SWIR).
Sierra Wireless, Inc. (NASDAQ:SWIR)investors should be aware of an increase in hedge fund sentiment lately. Our calculations also showed that SWIR isn't among the30 most popular stocks among hedge funds.
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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's take a peek at the new hedge fund action regarding Sierra Wireless, Inc. (NASDAQ:SWIR).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SWIR over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Douglas T. Granat'sTrigran Investmentshas the largest position in Sierra Wireless, Inc. (NASDAQ:SWIR), worth close to $30.3 million, accounting for 5.2% of its total 13F portfolio. On Trigran Investments's heels isArrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $6.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish include Jim Simons'sRenaissance Technologies, Jim Roumell'sRoumell Asset Managementand D. E. Shaw'sD E Shaw.
Now, key money managers were breaking ground themselves.Cove Street Capital, managed by Jeffrey Bronchick, initiated the most outsized position in Sierra Wireless, Inc. (NASDAQ:SWIR). Cove Street Capital had $0.6 million invested in the company at the end of the quarter. Peter Muller'sPDT Partnersalso initiated a $0.3 million position during the quarter. The other funds with brand new SWIR positions are Matthew Hulsizer'sPEAK6 Capital Managementand Matthew Hulsizer'sPEAK6 Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Sierra Wireless, Inc. (NASDAQ:SWIR) but similarly valued. We will take a look at B. Riley Financial, Inc. (NASDAQ:RILY), Greenhill & Co., Inc. (NYSE:GHL), Priority Technology Holdings, Inc. (NASDAQ:PRTH), and Cytokinetics, Inc. (NASDAQ:CYTK). All of these stocks' market caps resemble SWIR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RILY,10,84819,0 GHL,15,40189,2 PRTH,2,4360,-1 CYTK,16,69419,0 Average,10.75,49697,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $51 million in SWIR's case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Priority Technology Holdings, Inc. (NASDAQ:PRTH) is the least popular one with only 2 bullish hedge fund positions. Sierra Wireless, Inc. (NASDAQ:SWIR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SWIR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SWIR were disappointed as the stock returned -3.4% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Atlantic Capital Bancshares, Inc. (ACBI) A Good Stock To Buy?
Does Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
IsAtlantic Capital Bancshares, Inc. (NASDAQ:ACBI)the right pick for your portfolio? Money managers are getting less optimistic. The number of long hedge fund bets were cut by 2 lately. Our calculations also showed that acbi isn't among the30 most popular stocks among hedge funds.
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 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.
[caption id="attachment_758440" align="aligncenter" width="450"]
Michael Price of MFP Investors[/caption]
We're going to take a gander at the recent hedge fund action regarding Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in ACBI a year ago. 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 Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) was held byMendon Capital Advisors, which reported holding $21.3 million worth of stock at the end of March. It was followed by MFP Investors with a $16.9 million position. Other investors bullish on the company included Elizabeth Park Capital Management, Renaissance Technologies, and D E Shaw.
Due to the fact that Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) has faced declining sentiment from the entirety of the hedge funds we track, it's safe to say that there was a specific group of funds that elected to cut their full holdings heading into Q3. Interestingly, Ravi Chopra'sAzora Capitaldumped the biggest investment of the 700 funds watched by Insider Monkey, totaling an estimated $2.1 million in stock. Paul Marshall and Ian Wace's fund,Marshall Wace LLP, also cut its stock, about $0.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds heading into Q3.
Let's go over hedge fund activity in other stocks similar to Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI). These stocks are RTI Surgical Holdings, Inc. (NASDAQ:RTIX), Akorn, Inc. (NASDAQ:AKRX), Yintech Investment Holdings Limited (NASDAQ:YIN), and Trinity Merger Corp. (NASDAQ:TMCX). This group of stocks' market values match ACBI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RTIX,14,41155,2 AKRX,16,64437,1 YIN,2,494,0 TMCX,15,65966,1 Average,11.75,43013,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $76 million in ACBI's case. Akorn, Inc. (NASDAQ:AKRX) is the most popular stock in this table. On the other hand Yintech Investment Holdings Limited (NASDAQ:YIN) is the least popular one with only 2 bullish hedge fund positions. Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ACBI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ACBI were disappointed as the stock returned -4.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is International Bancshares Corp (IBOC) A Good Stock To Buy ?
"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in itsQ1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That's why we believe it would be worthwhile to take a look at the hedge fund sentiment on International Bancshares Corp (NASDAQ:IBOC) in order to identify whether reputable and successful top money managers continue to believe in its potential.
International Bancshares Corp (NASDAQ:IBOC)investors should pay attention to a decrease in activity from the world's largest hedge funds recently. Our calculations also showed that IBOC isn't among the30 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 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.
We're going to go over the fresh hedge fund action encompassing International Bancshares Corp (NASDAQ:IBOC).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -26% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IBOC over the last 15 quarters. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey,Polaris Capital Management, managed by Bernard Horn, holds the most valuable position in International Bancshares Corp (NASDAQ:IBOC). Polaris Capital Management has a $47.1 million position in the stock, comprising 2% of its 13F portfolio. The second largest stake is held byMillennium Management, led by Israel Englander, holding a $42.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism encompass Ravi Chopra'sAzora Capital, Cliff Asness'sAQR Capital Managementand Dmitry Balyasny'sBalyasny Asset Management.
Since International Bancshares Corp (NASDAQ:IBOC) has experienced a decline in interest from the smart money, we can see that there was a specific group of fund managers that slashed their entire stakes last quarter. Interestingly, Benjamin A. Smith'sLaurion Capital Managementdropped the biggest investment of all the hedgies watched by Insider Monkey, totaling an estimated $0.8 million in stock, and Michael Platt and William Reeves's BlueCrest Capital Mgmt. was right behind this move, as the fund dropped about $0.8 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 5 funds last quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as International Bancshares Corp (NASDAQ:IBOC) but similarly valued. These stocks are Meredith Corporation (NYSE:MDP), First Bancorp (NYSE:FBP), Cirrus Logic, Inc. (NASDAQ:CRUS), and QTS Realty Trust Inc (NYSE:QTS). This group of stocks' market valuations match IBOC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MDP,11,294686,-1 FBP,18,246590,-2 CRUS,17,226684,-3 QTS,22,371693,6 Average,17,284913,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $285 million. That figure was $151 million in IBOC's case. QTS Realty Trust Inc (NYSE:QTS) is the most popular stock in this table. On the other hand Meredith Corporation (NYSE:MDP) is the least popular one with only 11 bullish hedge fund positions. International Bancshares Corp (NASDAQ:IBOC) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately IBOC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); IBOC investors were disappointed as the stock returned -1.6% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About NII Holdings, Inc. (NIHD)
Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is NII Holdings, Inc. (NASDAQ:NIHD), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
IsNII Holdings, Inc. (NASDAQ:NIHD)a buy here? Hedge funds are in a bearish mood. The number of bullish hedge fund positions fell by 4 in recent months. Our calculations also showed that NIHD isn't among the30 most popular stocks among hedge funds.NIHDwas in 14 hedge funds' portfolios at the end of the first quarter of 2019. There were 18 hedge funds in our database with NIHD positions at the end of the previous quarter.
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.
Let's analyze the recent hedge fund action surrounding NII Holdings, Inc. (NASDAQ:NIHD).
At Q1's end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in NIHD over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in NII Holdings, Inc. (NASDAQ:NIHD) was held by683 Capital Partners, which reported holding $25.8 million worth of stock at the end of March. It was followed by Point State Capital with a $6.5 million position. Other investors bullish on the company included AQR Capital Management, Kavi Asset Management, and Citadel Investment Group.
Because NII Holdings, Inc. (NASDAQ:NIHD) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there were a few hedgies who were dropping their entire stakes last quarter. Intriguingly, Brian Sheehy'sIszo Capitalsold off the biggest investment of all the hedgies followed by Insider Monkey, valued at about $10.7 million in stock. Ed Bosek's fund,BeaconLight Capital, also cut its stock, about $6.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 4 funds last quarter.
Let's now review hedge fund activity in other stocks similar to NII Holdings, Inc. (NASDAQ:NIHD). We will take a look at Catasys, Inc. (NASDAQ:CATS), ASA Gold and Precious Metals Ltd (NYSE:ASA), Saga Communications, Inc. (NASDAQ:SGA), and ConforMIS, Inc. (NASDAQ:CFMS). This group of stocks' market caps resemble NIHD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CATS,6,2276,5 ASA,5,13600,0 SGA,3,26728,1 CFMS,4,36412,-2 Average,4.5,19754,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $41 million in NIHD's case. Catasys, Inc. (NASDAQ:CATS) is the most popular stock in this table. On the other hand Saga Communications, Inc. (NASDAQ:SGA) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks NII Holdings, Inc. (NASDAQ:NIHD) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NIHD wasn't nearly as popular as these 20 stocks and hedge funds that were betting on NIHD were disappointed as the stock returned -1.5% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About CorePoint Lodging Inc. (CPLG)
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 CorePoint Lodging Inc. (NYSE:CPLG) based on that data.
CorePoint Lodging Inc. (NYSE:CPLG)shareholders have witnessed a decrease in hedge fund sentiment in recent months.CPLGwas in 13 hedge funds' portfolios at the end of the first quarter of 2019. There were 16 hedge funds in our database with CPLG positions at the end of the previous quarter. Our calculations also showed that CPLG isn't among the30 most popular stocks among hedge funds.
In the eyes of most investors, hedge funds are viewed as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds in operation today, We hone in on the upper echelon of this club, around 750 funds. These money managers administer the majority of the hedge fund industry's total capital, and by keeping an eye on their best investments, Insider Monkey has brought to light numerous investment strategies that have historically defeated the market. Insider Monkey's flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to analyze the fresh hedge fund action encompassing CorePoint Lodging Inc. (NYSE:CPLG).
At Q1's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CPLG over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in CorePoint Lodging Inc. (NYSE:CPLG) was held byIndaba Capital Management, which reported holding $14.4 million worth of stock at the end of March. It was followed by D E Shaw with a $7.9 million position. Other investors bullish on the company included Scion Asset Management, Caerus Global Investors, and AQR Capital Management.
Because CorePoint Lodging Inc. (NYSE:CPLG) has witnessed declining sentiment from the smart money, it's safe to say that there were a few fund managers that slashed their full holdings in the third quarter. At the top of the heap, Isaac Corre'sGovernors Lanecut the largest position of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $12.1 million in stock, and Kelly Hampaul's Everett Capital Advisors was right behind this move, as the fund dropped about $7.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in the third quarter.
Let's go over hedge fund activity in other stocks similar to CorePoint Lodging Inc. (NYSE:CPLG). These stocks are eXp World Holdings, Inc. (NASDAQ:EXPI), Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), Axcelis Technologies Inc (NASDAQ:ACLS), and Heska Corp (NASDAQ:HSKA). All of these stocks' market caps are closest to CPLG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EXPI,4,3233,-3 HCCI,12,74834,1 ACLS,16,75026,7 HSKA,11,38274,-1 Average,10.75,47842,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $40 million in CPLG's case. Axcelis Technologies Inc (NASDAQ:ACLS) is the most popular stock in this table. On the other hand eXp World Holdings, Inc. (NASDAQ:EXPI) is the least popular one with only 4 bullish hedge fund positions. CorePoint Lodging Inc. (NYSE:CPLG) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on CPLG as the stock returned 19% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Zumiez Inc. (ZUMZ) A Good Stock To Buy ?
Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by more than 6 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Zumiez Inc. (NASDAQ:ZUMZ).
IsZumiez Inc. (NASDAQ:ZUMZ)worth your attention right now? Money managers are in an optimistic mood. The number of bullish hedge fund positions rose by 1 lately. Our calculations also showed that ZUMZ isn't among the30 most popular stocks among hedge funds.ZUMZwas in 13 hedge funds' portfolios at the end of the first quarter of 2019. There were 12 hedge funds in our database with ZUMZ holdings at the end of the previous quarter.
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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to take a look at the fresh hedge fund action encompassing Zumiez Inc. (NASDAQ:ZUMZ).
At Q1's end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in ZUMZ a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, 0 held the most valuable stake in Zumiez Inc. (NASDAQ:ZUMZ), which was worth $9.9 million at the end of the first quarter. On the second spot was AQR Capital Management which amassed $6.9 million worth of shares. Moreover, Maverick Capital, Arrowstreet Capital, and Balyasny Asset Management were also bullish on Zumiez Inc. (NASDAQ:ZUMZ), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key hedge funds have been driving this bullishness.Maverick Capital, managed by Lee Ainslie, assembled the most outsized position in Zumiez Inc. (NASDAQ:ZUMZ). Maverick Capital had $6.6 million invested in the company at the end of the quarter. Steve Cohen'sPoint72 Asset Managementalso made a $1.3 million investment in the stock during the quarter. The other funds with brand new ZUMZ positions are John Overdeck and David Siegel'sTwo Sigma Advisors, David Harding'sWinton Capital Management, and Matthew Hulsizer'sPEAK6 Capital Management.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Zumiez Inc. (NASDAQ:ZUMZ) but similarly valued. We will take a look at New Media Investment Group Inc (NYSE:NEWM), Photronics, Inc. (NASDAQ:PLAB), Kura Oncology, Inc. (NASDAQ:KURA), and Acorda Therapeutics Inc (NASDAQ:ACOR). All of these stocks' market caps are closest to ZUMZ's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NEWM,17,48309,0 PLAB,13,67607,-3 KURA,17,207125,2 ACOR,22,161061,0 Average,17.25,121026,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $121 million. That figure was $34 million in ZUMZ's case. Acorda Therapeutics Inc (NASDAQ:ACOR) is the most popular stock in this table. On the other hand Photronics, Inc. (NASDAQ:PLAB) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Zumiez Inc. (NASDAQ:ZUMZ) is even less popular than PLAB. Hedge funds dodged a bullet by taking a bearish stance towards ZUMZ. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ZUMZ wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); ZUMZ investors were disappointed as the stock returned 0.2% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Credit Suisse Group AG (CS) A Good Stock To Buy ?
"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in itsQ1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Credit Suisse Group AG (NYSE:CS).
Credit Suisse Group AG (NYSE:CS)shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds' portfolios at the end of March. 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 Thomson Reuters Corporation (NYSE:TRI), Monster Beverage Corp (NASDAQ:MNST), and Tencent Music Entertainment Group (NYSE:TME) to gather more data points.
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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_746830" align="aligncenter" width="473"]
Matthew Hulsizer of PEAK6 Capital[/caption]
Let's take a look at the fresh hedge fund action surrounding Credit Suisse Group AG (NYSE:CS).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CS over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Credit Suisse Group AG (NYSE:CS) was held byRenaissance Technologies, which reported holding $83.3 million worth of stock at the end of March. It was followed by Masters Capital Management with a $39.7 million position. Other investors bullish on the company included Orbis Investment Management, PEAK6 Capital Management, and Two Sigma Advisors.
Judging by the fact that Credit Suisse Group AG (NYSE:CS) has witnessed falling interest from the smart money, we can see that there is a sect of hedgies that slashed their entire stakes heading into Q3. Intriguingly, Mike Masters'sMasters Capital Managementdumped the largest investment of the "upper crust" of funds watched by Insider Monkey, valued at close to $21.7 million in call options, and Benjamin A. Smith's Laurion Capital Management was right behind this move, as the fund dropped about $1.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Credit Suisse Group AG (NYSE:CS) but similarly valued. These stocks are Thomson Reuters Corporation (NYSE:TRI), Monster Beverage Corp (NASDAQ:MNST), Tencent Music Entertainment Group (NYSE:TME), and BT Group plc (NYSE:BT). This group of stocks' market valuations match CS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRI,17,227269,-2 MNST,33,2067252,1 TME,20,424298,-5 BT,14,39409,5 Average,21,689557,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $690 million. That figure was $195 million in CS's case. Monster Beverage Corp (NASDAQ:MNST) is the most popular stock in this table. On the other hand BT Group plc (NYSE:BT) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Credit Suisse Group AG (NYSE:CS) is even less popular than BT. Hedge funds dodged a bullet by taking a bearish stance towards CS. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CS wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CS investors were disappointed as the stock returned 2.7% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On BT Group plc (BT)
Is BT Group plc (NYSE:BT) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
BT Group plc (NYSE:BT)investors should be aware of an increase in enthusiasm from smart money of late.BTwas in 14 hedge funds' portfolios at the end of the first quarter of 2019. There were 9 hedge funds in our database with BT holdings at the end of the previous quarter. Our calculations also showed that BT isn't among the30 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 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.
[caption id="attachment_758442" align="aligncenter" width="450"]
Michael Platt of Bluecrest Capital Management[/caption]
Let's take a look at the fresh hedge fund action surrounding BT Group plc (NYSE:BT).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 56% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BT over the last 15 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons'sRenaissance Technologieshas the largest position in BT Group plc (NYSE:BT), worth close to $17.1 million, amounting to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Griffin ofCitadel Investment Group, with a $13.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism consist of Steve Cohen'sPoint72 Asset Management, Minhua Zhang'sWeld Capital Managementand Israel Englander'sMillennium Management.
As aggregate interest increased, specific money managers have jumped into BT Group plc (NYSE:BT) headfirst.Weld Capital Management, managed by Minhua Zhang, assembled the most valuable position in BT Group plc (NYSE:BT). Weld Capital Management had $1.7 million invested in the company at the end of the quarter. Benjamin A. Smith'sLaurion Capital Managementalso made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Gelband'sExodusPoint Capital, Mike Vranos'sEllington, and Michael Platt and William Reeves'sBlueCrest Capital Mgmt..
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as BT Group plc (NYSE:BT) but similarly valued. We will take a look at Xcel Energy Inc (NASDAQ:XEL), Canadian Pacific Railway Limited (NYSE:CP), Paychex, Inc. (NASDAQ:PAYX), and ONEOK, Inc. (NYSE:OKE). This group of stocks' market caps are similar to BT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XEL,16,527326,-5 CP,30,1974726,-10 PAYX,21,808401,-9 OKE,14,278924,-12 Average,20.25,897344,-9 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $897 million. That figure was $39 million in BT's case. Canadian Pacific Railway Limited (NYSE:CP) is the most popular stock in this table. On the other hand ONEOK, Inc. (NYSE:OKE) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks BT Group plc (NYSE:BT) is even less popular than OKE. Hedge funds dodged a bullet by taking a bearish stance towards BT. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately BT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BT investors were disappointed as the stock returned -10% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Is ONEOK, Inc. (OKE) A Good Stock To Buy?
It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 18.7% so far in 2019 and outperformed the S&P 500 ETF by 6.6 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards ONEOK, Inc. (NYSE: OKE ) changed during the first quarter. Is ONEOK, Inc. (NYSE: OKE ) a splendid stock to buy now? Investors who are in the know are in a bearish mood. The number of long hedge fund bets went down by 12 recently. Our calculations also showed that OKE isn't among the 30 most popular stocks among hedge funds . OKE was in 14 hedge funds' portfolios at the end of the first quarter of 2019. There were 26 hedge funds in our database with OKE positions at the end of the previous quarter. At the moment there are dozens of signals shareholders can use to value their stock investments. Some of the most underrated signals are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat their index-focused peers by a significant amount ( see the details here ). [caption id="attachment_758454" align="aligncenter" width="450"] James Dondero Highland Capital Management James Dondero of Highland Capital Management[/caption] Let's review the recent hedge fund action regarding ONEOK, Inc. (NYSE: OKE ). Hedge fund activity in ONEOK, Inc. (NYSE:OKE) At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -46% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards OKE over the last 15 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions). Story continues OKE_june2019 More specifically, Zimmer Partners was the largest shareholder of ONEOK, Inc. (NYSE:OKE), with a stake worth $205.7 million reported as of the end of March. Trailing Zimmer Partners was Deep Basin Capital, which amassed a stake valued at $23.2 million. GAMCO Investors, Citadel Investment Group, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios. Seeing as ONEOK, Inc. (NYSE:OKE) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedgies that decided to sell off their positions entirely heading into Q3. Intriguingly, Jim Simons's Renaissance Technologies cut the biggest position of all the hedgies followed by Insider Monkey, worth an estimated $89.7 million in stock. Ken Griffin's fund, Citadel Investment Group , also cut its stock, about $19.6 million worth. These moves are interesting, as total hedge fund interest fell by 12 funds heading into Q3. Let's now take a look at hedge fund activity in other stocks similar to ONEOK, Inc. (NYSE:OKE). These stocks are Baker Hughes, a GE company (NYSE: BHGE ), Southwest Airlines Co. (NYSE: LUV ), Pinduoduo Inc. (NASDAQ: PDD ), and IQVIA Holdings, Inc. (NYSE: IQV ). This group of stocks' market caps are closest to OKE's market cap. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BHGE,23,415986,-5 LUV,35,3383550,-5 PDD,32,496446,12 IQV,64,5288724,15 Average,38.5,2396177,4.25 [/table] View table here if you experience formatting issues. As you can see these stocks had an average of 38.5 hedge funds with bullish positions and the average amount invested in these stocks was $2396 million. That figure was $279 million in OKE's case. IQVIA Holdings, Inc. (NYSE: IQV ) is the most popular stock in this table. On the other hand Baker Hughes, a GE company (NYSE: BHGE ) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks ONEOK, Inc. (NYSE:OKE) is even less popular than BHGE. Hedge funds dodged a bullet by taking a bearish stance towards OKE. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately OKE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); OKE investors were disappointed as the stock returned -3.9% during the same time frame 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 the second quarter. Disclosure: None. This article was originally published at Insider Monkey . Related Content How to Best Use Insider Monkey To Increase Your Returns Billionaire Ken Fisher’s Top Dividend Stock Picks 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
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Is Chinasoft International Limited's (HKG:354) CEO Pay Fair?
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Henry Chen is the CEO of Chinasoft International Limited (HKG:354). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Chinasoft International
At the time of writing our data says that Chinasoft International Limited has a market cap of HK$9.6b, and is paying total annual CEO compensation of CN¥4.3m. (This figure is for the year to December 2017). Notably, the salary of CN¥4.2m is the vast majority of the CEO compensation. When we examined a selection of companies with market caps ranging from CN¥6.9b to CN¥22b, we found the median CEO total compensation was CN¥3.5m.
So Henry Chen receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Chinasoft International, below.
Over the last three years Chinasoft International Limited has grown its earnings per share (EPS) by an average of 23% per year (using a line of best fit). Its revenue is up 15% over last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested inthisfreevisualization of analyst forecasts.
Chinasoft International Limited has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Henry Chen is paid around the same as most CEOs of similar size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. Whatever your view on compensation, you might want tocheck if insiders are buying or selling Chinasoft International shares (free trial).
Of course,you might find a fantastic investment by looking elsewhere.So take a peek at thisfreelist of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Here is What Hedge Funds Think About STMicroelectronics N.V. (STM)
Is STMicroelectronics N.V. (NYSE:STM) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
IsSTMicroelectronics N.V. (NYSE:STM)a healthy stock for your portfolio? Investors who are in the know are in an optimistic mood. The number of long hedge fund positions rose by 3 lately. Our calculations also showed that STM isn't among the30 most popular stocks among hedge funds.
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 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.
Let's check out the latest hedge fund action regarding STMicroelectronics N.V. (NYSE:STM).
At Q1's end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in STM a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Arrowstreet Capitalheld the most valuable stake in STMicroelectronics N.V. (NYSE:STM), which was worth $66.8 million at the end of the first quarter. On the second spot was KCL Capital which amassed $18.6 million worth of shares. Moreover, Renaissance Technologies, Sensato Capital Management, and Citadel Investment Group were also bullish on STMicroelectronics N.V. (NYSE:STM), allocating a large percentage of their portfolios to this stock.
Now, key hedge funds were leading the bulls' herd.KCL Capital, managed by Kevin Cottrell and Chris LaSusa, assembled the largest position in STMicroelectronics N.V. (NYSE:STM). KCL Capital had $18.6 million invested in the company at the end of the quarter. Joe DiMenna'sZWEIG DIMENNA PARTNERSalso initiated a $1.9 million position during the quarter. The following funds were also among the new STM investors: Matthew Tewksbury'sStevens Capital Management, Dmitry Balyasny'sBalyasny Asset Management, and Mike Vranos'sEllington.
Let's go over hedge fund activity in other stocks similar to STMicroelectronics N.V. (NYSE:STM). These stocks are The J.M. Smucker Company (NYSE:SJM), Telecom Italia S.p.A. (NYSE:TI), Godaddy Inc (NYSE:GDDY), and Citrix Systems, Inc. (NASDAQ:CTXS). This group of stocks' market caps resemble STM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SJM,26,574357,6 TI,1,4809,-2 GDDY,48,2821575,5 CTXS,34,2131744,-2 Average,27.25,1383121,1.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $1383 million. That figure was $120 million in STM's case. Godaddy Inc (NYSE:GDDY) is the most popular stock in this table. On the other hand Telecom Italia S.p.A. (NYSE:TI) is the least popular one with only 1 bullish hedge fund positions. STMicroelectronics N.V. (NYSE:STM) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on STM as the stock returned 12.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Huazhu Group, Limited (HTHT) A Good Stock To Buy ?
Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we pay special attention to the hedge fund activity in the small-cap space.
Huazhu Group, Limited (NASDAQ:HTHT)has seen a decrease in enthusiasm from smart money recently. Our calculations also showed that HTHT isn't among the30 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 gander at the key hedge fund action regarding Huazhu Group, Limited (NASDAQ:HTHT).
At Q1's end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in HTHT over the last 15 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,Yiheng Capitalwas the largest shareholder of Huazhu Group, Limited (NASDAQ:HTHT), with a stake worth $113.7 million reported as of the end of March. Trailing Yiheng Capital was Platinum Asset Management, which amassed a stake valued at $46.2 million. AQR Capital Management, Fisher Asset Management, and Prescott Group Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that Huazhu Group, Limited (NASDAQ:HTHT) has witnessed falling interest from the smart money, it's easy to see that there is a sect of hedgies that decided to sell off their full holdings by the end of the third quarter. Interestingly, Charles Clough'sClough Capital Partnerssold off the biggest position of all the hedgies watched by Insider Monkey, totaling about $7.7 million in stock. Gavin Saitowitz and Cisco J. del Valle's fund,Springbok Capital, also dumped its stock, about $6.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Huazhu Group, Limited (NASDAQ:HTHT) but similarly valued. These stocks are BanColombia S.A. (NYSE:CIB), Advance Auto Parts, Inc. (NYSE:AAP), Universal Health Services, Inc. (NYSE:UHS), and Quest Diagnostics Incorporated (NYSE:DGX). All of these stocks' market caps are closest to HTHT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CIB,11,154486,5 AAP,47,2297068,-4 UHS,29,761401,1 DGX,22,303617,-4 Average,27.25,879143,-0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $879 million. That figure was $196 million in HTHT's case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 11 bullish hedge fund positions. Huazhu Group, Limited (NASDAQ:HTHT) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately HTHT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HTHT investors were disappointed as the stock returned -21.7% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Barnes & Noble Education Inc (BNED) A Good Stock To Buy ?
At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in. Barnes & Noble Education Inc (NYSE: BNED ) was in 14 hedge funds' portfolios at the end of March. BNED has experienced a decrease in activity from the world's largest hedge funds in recent months. There were 18 hedge funds in our database with BNED holdings at the end of the previous quarter. Our calculations also showed that BNED isn't among the 30 most popular stocks among hedge funds . So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio. Story continues David Abrams We're going to go over the recent hedge fund action regarding Barnes & Noble Education Inc (NYSE: BNED ). What does smart money think about Barnes & Noble Education Inc (NYSE:BNED)? At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from the fourth quarter of 2018. On the other hand, there were a total of 13 hedge funds with a bullish position in BNED a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions). BNED_jun2019 Among these funds, Abrams Capital Management held the most valuable stake in Barnes & Noble Education Inc (NYSE:BNED), which was worth $17.9 million at the end of the first quarter. On the second spot was AQR Capital Management which amassed $2.5 million worth of shares. Moreover, Two Sigma Advisors, Arrowstreet Capital, and Royce & Associates were also bullish on Barnes & Noble Education Inc (NYSE:BNED), allocating a large percentage of their portfolios to this stock. Because Barnes & Noble Education Inc (NYSE:BNED) has experienced falling interest from hedge fund managers, it's safe to say that there was a specific group of funds who sold off their entire stakes heading into Q3. Interestingly, William C. Martin's Raging Capital Management dumped the biggest position of the 700 funds tracked by Insider Monkey, valued at an estimated $2.9 million in stock. Frederick DiSanto's fund, Ancora Advisors , also dumped its stock, about $2.1 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds heading into Q3. Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Barnes & Noble Education Inc (NYSE:BNED) but similarly valued. We will take a look at Blue Apron Holdings, Inc. (NYSE: APRN ), CRH Medical Corporation (NYSE: CRHM ), Lee Enterprises, Incorporated (NYSE: LEE ), and RigNet Inc (NASDAQ: RNET ). This group of stocks' market caps are closest to BNED's market cap. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APRN,7,3669,2 CRHM,7,29756,-1 LEE,12,19351,1 RNET,4,14144,-1 Average,7.5,16730,0.25 [/table] View table here if you experience formatting issues. As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $23 million in BNED's case. Lee Enterprises, Incorporated (NYSE: LEE ) is the most popular stock in this table. On the other hand RigNet Inc (NASDAQ: RNET ) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Barnes & Noble Education Inc (NYSE:BNED) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately BNED wasn't nearly as popular as these 20 stocks and hedge funds that were betting on BNED were disappointed as the stock returned -25% during the same 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 in Q2. Disclosure: None. This article was originally published at Insider Monkey . 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Hedge Funds Have Never Been More Bullish On IDT Corporation (IDT)
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of IDT Corporation (NYSE:IDT).
IDT Corporation (NYSE:IDT)shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 14 hedge funds' portfolios at the end of March. 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 Olympic Steel, Inc. (NASDAQ:ZEUS), Akoustis Technologies, Inc. (NASDAQ:AKTS), and Paratek Pharmaceuticals Inc (NASDAQ:PRTK) to gather more data points.
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.
Let's take a look at the key hedge fund action encompassing IDT Corporation (NYSE:IDT).
Heading into the second quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IDT over the last 15 quarters. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds,Renaissance Technologiesheld the most valuable stake in IDT Corporation (NYSE:IDT), which was worth $11 million at the end of the first quarter. On the second spot was D E Shaw which amassed $6 million worth of shares. Moreover, Millennium Management, Arrowstreet Capital, and Royce & Associates were also bullish on IDT Corporation (NYSE:IDT), allocating a large percentage of their portfolios to this stock.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position:Kahn Brothers. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund wasArrowstreet Capital).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as IDT Corporation (NYSE:IDT) but similarly valued. These stocks are Olympic Steel, Inc. (NASDAQ:ZEUS), Akoustis Technologies, Inc. (NASDAQ:AKTS), Paratek Pharmaceuticals Inc (NASDAQ:PRTK), and The GDL Fund (NYSE:GDL). This group of stocks' market valuations match IDT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ZEUS,8,4368,2 AKTS,8,5028,4 PRTK,14,56810,0 GDL,3,5825,0 Average,8.25,18008,1.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $22 million in IDT's case. Paratek Pharmaceuticals Inc (NASDAQ:PRTK) is the most popular stock in this table. On the other hand The GDL Fund (NYSE:GDL) is the least popular one with only 3 bullish hedge fund positions. IDT Corporation (NYSE:IDT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on IDT as the stock returned 32.7% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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China Resources Land Limited (HKG:1109): Is It A Smart Long Term Opportunity?
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Since China Resources Land Limited (HKG:1109) released its earnings in December 2018, it seems that analyst expectations are fairly bearish, with profits predicted to rise by 7.0% next year compared with the higher past 5-year average growth rate of 15%. By 2020, we can expect China Resources Land’s bottom line to reach CN¥26b, a jump from the current trailing-twelve-month of CN¥24b. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures shouldresearch its fundamentals here.
See our latest analysis for China Resources Land
The longer term view from the 26 analysts covering 1109 is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for 1109, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of CN¥24b and the final forecast of CN¥35b by 2022, the annual rate of growth for 1109’s earnings is 12%. This leads to an EPS of CN¥4.98 in the final year of projections relative to the current EPS of CN¥3.5. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 20% to 15% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For China Resources Land, I've put together three key factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is China Resources Land worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether China Resources Land is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of China Resources Land? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Here’s What Hedge Funds Think About Senseonics Holdings, Inc. (SENS)
After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Senseonics Holdings, Inc. (NYSEAMEX:SENS).
IsSenseonics Holdings, Inc. (NYSEAMEX:SENS)an exceptional investment now? Prominent investors are turning less bullish. The number of bullish hedge fund bets retreated by 4 in recent months. Our calculations also showed that SENS isn't among the30 most popular stocks among hedge funds.
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 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 gander at the recent hedge fund action surrounding Senseonics Holdings, Inc. (NYSEAMEX:SENS).
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the fourth quarter of 2018. On the other hand, there were a total of 4 hedge funds with a bullish position in SENS a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Michael Castor'sSio Capitalhas the largest position in Senseonics Holdings, Inc. (NYSEAMEX:SENS), worth close to $1.4 million, corresponding to 0.4% of its total 13F portfolio. The second largest stake is held byEndurant Capital Management, led by Vishal Saluja and Pham Quang, holding a $1.1 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions comprise Ken Griffin'sCitadel Investment Group, Sander Gerber'sHudson Bay Capital Managementand Charles Davidson and Joseph Jacobs'sWexford Capital.
Since Senseonics Holdings, Inc. (NYSEAMEX:SENS) has witnessed declining sentiment from the smart money, it's easy to see that there lies a certain "tier" of money managers that slashed their full holdings heading into Q3. Interestingly, Phil Frohlich'sPrescott Group Capital Managementdropped the biggest position of all the hedgies monitored by Insider Monkey, valued at an estimated $1.4 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund sold off about $1.3 million worth. These transactions are important to note, as total hedge fund interest dropped by 4 funds heading into Q3.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Senseonics Holdings, Inc. (NYSEAMEX:SENS) but similarly valued. We will take a look at Silvercorp Metals Inc. (NYSEAMEX:SVM), U.S. Lime & Minerals Inc. (NASDAQ:USLM), Financial Institutions, Inc. (NASDAQ:FISI), and Tower International Inc (NYSE:TOWR). All of these stocks' market caps are closest to SENS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SVM,9,17911,-3 USLM,4,31382,2 FISI,11,39671,1 TOWR,13,41821,-3 Average,9.25,32696,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $5 million in SENS's case. Tower International Inc (NYSE:TOWR) is the most popular stock in this table. On the other hand U.S. Lime & Minerals Inc. (NASDAQ:USLM) is the least popular one with only 4 bullish hedge fund positions. Senseonics Holdings, Inc. (NYSEAMEX:SENS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SENS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SENS were disappointed as the stock returned -15.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Ares Commercial Real Estate Corp (ACRE)
It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren't usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index's returns in recent years), more than 50% of the constituents of the Standard and Poor’s 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you'd fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of 6 percentage points during the first 5 months of 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That's why we are going to go over recent hedge fund activity in Ares Commercial Real Estate Corp (NYSE:ACRE).
IsAres Commercial Real Estate Corp (NYSE:ACRE)a buy, sell, or hold? The best stock pickers are getting more optimistic. The number of bullish hedge fund bets moved up by 5 recently. Our calculations also showed that ACRE isn't among the30 most popular stocks among hedge funds.
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 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 go over the key hedge fund action encompassing Ares Commercial Real Estate Corp (NYSE:ACRE).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from the fourth quarter of 2018. On the other hand, there were a total of 7 hedge funds with a bullish position in ACRE a year ago. With hedge funds' sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically,Millennium Managementwas the largest shareholder of Ares Commercial Real Estate Corp (NYSE:ACRE), with a stake worth $7.6 million reported as of the end of March. Trailing Millennium Management was Marshall Wace LLP, which amassed a stake valued at $5.5 million. Renaissance Technologies, Two Sigma Advisors, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, key hedge funds have jumped into Ares Commercial Real Estate Corp (NYSE:ACRE) headfirst.Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in Ares Commercial Real Estate Corp (NYSE:ACRE). Marshall Wace LLP had $5.5 million invested in the company at the end of the quarter. David Harding'sWinton Capital Managementalso made a $0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Algert and Kevin Coldiron'sAlgert Coldiron Investors, Bruce Kovner'sCaxton Associates LP, and Gavin Saitowitz and Cisco J. del Valle'sSpringbok Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Ares Commercial Real Estate Corp (NYSE:ACRE) but similarly valued. These stocks are Sentinel Energy Services Inc. (NASDAQ:STNL), Community Health Systems (NYSE:CYH), CAI International Inc (NYSE:CAI), and Senseonics Holdings, Inc. (NYSEAMEX:SENS). This group of stocks' market caps are similar to ACRE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STNL,15,160888,-1 CYH,18,51979,-8 CAI,16,112720,-1 SENS,10,5479,-4 Average,14.75,82767,-3.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $83 million. That figure was $25 million in ACRE's case. Community Health Systems (NYSE:CYH) is the most popular stock in this table. On the other hand Senseonics Holdings, Inc. (NYSEAMEX:SENS) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Ares Commercial Real Estate Corp (NYSE:ACRE) is even less popular than SENS. Hedge funds dodged a bullet by taking a bearish stance towards ACRE. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ACRE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); ACRE investors were disappointed as the stock returned 0.9% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About SMART Global Holdings, Inc. (SGH)
The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards SMART Global Holdings, Inc. (NASDAQ:SGH).
SMART Global Holdings, Inc. (NASDAQ:SGH)investors should be aware of a decrease in hedge fund interest lately.SGHwas in 10 hedge funds' portfolios at the end of March. There were 14 hedge funds in our database with SGH positions at the end of the previous quarter. Our calculations also showed that SGH isn't among the30 most popular stocks among hedge funds.
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 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 key hedge fund action surrounding SMART Global Holdings, Inc. (NASDAQ:SGH).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SGH over the last 15 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.
Of the funds tracked by Insider Monkey, Jim Davidson,áDave RouxáandáGlenn Hutchins'sSilver Lake Partnershas the largest position in SMART Global Holdings, Inc. (NASDAQ:SGH), worth close to $177.7 million, amounting to 4.1% of its total 13F portfolio. Sitting at the No. 2 spot isRenaissance Technologies, led by Jim Simons, holding a $6.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism encompass Seymour Sy Kaufman and Michael Stark'sCrosslink Capital, Ken Griffin'sCitadel Investment Groupand Cliff Asness'sAQR Capital Management.
Judging by the fact that SMART Global Holdings, Inc. (NASDAQ:SGH) has witnessed bearish sentiment from hedge fund managers, it's safe to say that there lies a certain "tier" of hedge funds that slashed their positions entirely heading into Q3. At the top of the heap, Peter S. Park'sPark West Asset Managementdropped the largest position of the 700 funds tracked by Insider Monkey, worth about $59.4 million in stock, and Richard Driehaus's Driehaus Capital was right behind this move, as the fund cut about $10.9 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 4 funds heading into Q3.
Let's now take a look at hedge fund activity in other stocks similar to SMART Global Holdings, Inc. (NASDAQ:SGH). These stocks are EVI Industries, Inc. (NYSEAMEX:EVI), MarineMax, Inc. (NYSE:HZO), Ares Commercial Real Estate Corp (NYSE:ACRE), and Sentinel Energy Services Inc. (NASDAQ:STNL). This group of stocks' market valuations match SGH's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EVI,1,2642,0 HZO,11,26952,-6 ACRE,10,24897,5 STNL,15,160888,-1 Average,9.25,53845,-0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $196 million in SGH's case. Sentinel Energy Services Inc. (NASDAQ:STNL) is the most popular stock in this table. On the other hand EVI Industries, Inc. (NYSEAMEX:EVI) is the least popular one with only 1 bullish hedge fund positions. SMART Global Holdings, Inc. (NASDAQ:SGH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SGH wasn't nearly as popular as these 20 stocks and hedge funds that were betting on SGH were disappointed as the stock returned 1% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About Green Brick Partners Inc (GRBK)
Hedge fund managers like David Einhorn, Bill Ackman, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Green Brick Partners Inc (NASDAQ:GRBK).
Green Brick Partners Inc (NASDAQ:GRBK)investors should be aware of a decrease in activity from the world's largest hedge funds lately.GRBKwas in 10 hedge funds' portfolios at the end of March. There were 14 hedge funds in our database with GRBK positions at the end of the previous quarter. Our calculations also showed that GRBK isn't among the30 most popular stocks among hedge funds.
If you'd ask most shareholders, hedge funds are perceived as slow, old financial vehicles of years past. While there are greater than 8000 funds with their doors open today, We choose to focus on the elite of this group, approximately 750 funds. These investment experts shepherd the majority of the smart money's total capital, and by tailing their finest equity investments, Insider Monkey has uncovered various investment strategies that have historically surpassed Mr. Market. Insider Monkey's flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a gander at the key hedge fund action encompassing Green Brick Partners Inc (NASDAQ:GRBK).
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards GRBK over the last 15 quarters. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically,Greenlight Capitalwas the largest shareholder of Green Brick Partners Inc (NASDAQ:GRBK), with a stake worth $211 million reported as of the end of March. Trailing Greenlight Capital was Ariel Investments, which amassed a stake valued at $17.2 million. Stadium Capital Management, Birch Run Capital, and SCW Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Green Brick Partners Inc (NASDAQ:GRBK) has faced declining sentiment from hedge fund managers, we can see that there lies a certain "tier" of funds that slashed their full holdings in the third quarter. At the top of the heap, Israel Englander'sMillennium Managementdropped the biggest stake of the 700 funds monitored by Insider Monkey, worth about $0.2 million in stock, and John Overdeck and David Siegel's Two Sigma Advisors was right behind this move, as the fund said goodbye to about $0.2 million worth. These moves are interesting, as total hedge fund interest fell by 4 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Green Brick Partners Inc (NASDAQ:GRBK) but similarly valued. These stocks are Heritage Insurance Holdings Inc (NYSE:HRTG), Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI), RTI Surgical Holdings, Inc. (NASDAQ:RTIX), and Akorn, Inc. (NASDAQ:AKRX). This group of stocks' market values resemble GRBK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HRTG,9,33157,3 ACBI,12,76229,-2 RTIX,14,41155,2 AKRX,16,64437,1 Average,12.75,53745,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $276 million in GRBK's case. Akorn, Inc. (NASDAQ:AKRX) is the most popular stock in this table. On the other hand Heritage Insurance Holdings Inc (NYSE:HRTG) is the least popular one with only 9 bullish hedge fund positions. Green Brick Partners Inc (NASDAQ:GRBK) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GRBK wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GRBK investors were disappointed as the stock returned 2.6% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Did Hedge Funds Drop The Ball On B. Riley Financial, Inc. (RILY) ?
Does B. Riley Financial, Inc. (NASDAQ:RILY) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
B. Riley Financial, Inc. (NASDAQ:RILY)shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds' portfolios at the end of the first quarter of 2019. At the end of this article we will also compare RILY to other stocks including Greenhill & Co., Inc. (NYSE:GHL), Priority Technology Holdings, Inc. (NASDAQ:PRTH), and Cytokinetics, Inc. (NASDAQ:CYTK) to get a better sense of its popularity.
If you'd ask most investors, hedge funds are perceived as underperforming, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading today, Our experts hone in on the aristocrats of this group, approximately 750 funds. Most estimates calculate that this group of people manage most of the smart money's total asset base, and by keeping an eye on their unrivaled stock picks, Insider Monkey has identified a number of investment strategies that have historically beaten the broader indices. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a glance at the latest hedge fund action encompassing B. Riley Financial, Inc. (NASDAQ:RILY).
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards RILY over the last 15 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
Among these funds,Elliott Managementheld the most valuable stake in B. Riley Financial, Inc. (NASDAQ:RILY), which was worth $38.5 million at the end of the first quarter. On the second spot was Nokomis Capital which amassed $27.4 million worth of shares. Moreover, Royce & Associates, Manatuck Hill Partners, and Ancora Advisors were also bullish on B. Riley Financial, Inc. (NASDAQ:RILY), allocating a large percentage of their portfolios to this stock.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position:Marshall Wace LLP. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund wasWinton Capital Management).
Let's now take a look at hedge fund activity in other stocks similar to B. Riley Financial, Inc. (NASDAQ:RILY). These stocks are Greenhill & Co., Inc. (NYSE:GHL), Priority Technology Holdings, Inc. (NASDAQ:PRTH), Cytokinetics, Inc. (NASDAQ:CYTK), and The York Water Company (NASDAQ:YORW). This group of stocks' market caps resemble RILY's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GHL,15,40189,2 PRTH,2,4360,-1 CYTK,16,69419,0 YORW,5,17100,0 Average,9.5,32767,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $85 million in RILY's case. Cytokinetics, Inc. (NASDAQ:CYTK) is the most popular stock in this table. On the other hand Priority Technology Holdings, Inc. (NASDAQ:PRTH) is the least popular one with only 2 bullish hedge fund positions. B. Riley Financial, Inc. (NASDAQ:RILY) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on RILY as the stock returned 21.1% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Unit Corporation (UNT) A Good Stock To Buy?
Hedge funds are known to underperform the bull markets but that's not because they are bad at investing. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. Hedge funds underperform because they are hedged. The Standard and Poor’s 500 Index returned approximately 12.1% in the first 5 months of this year through May 30th (including dividend payments). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period. An average long/short hedge fund returned only a fraction of this due to the hedges they implement and the large fees they charge. Our research covering the last 18 years indicates that investors can outperform the market by imitating hedge funds' stock picks rather than directly investing in hedge funds. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Unit Corporation (NYSE:UNT).
IsUnit Corporation (NYSE:UNT)a superb stock to buy now? Money managers are getting less bullish. The number of long hedge fund positions fell by 5 lately. Our calculations also showed that UNT isn't among the30 most popular stocks among hedge funds.UNTwas in 10 hedge funds' portfolios at the end of March. There were 15 hedge funds in our database with UNT positions at the end of the previous quarter.
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 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.
Let's take a peek at the fresh hedge fund action regarding Unit Corporation (NYSE:UNT).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in UNT over the last 15 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds,Marshall Wace LLPheld the most valuable stake in Unit Corporation (NYSE:UNT), which was worth $7.1 million at the end of the first quarter. On the second spot was Royce & Associates which amassed $2 million worth of shares. Moreover, D E Shaw, Millennium Management, and Arrowstreet Capital were also bullish on Unit Corporation (NYSE:UNT), allocating a large percentage of their portfolios to this stock.
Due to the fact that Unit Corporation (NYSE:UNT) has witnessed declining sentiment from hedge fund managers, logic holds that there exists a select few hedge funds who were dropping their positions entirely in the third quarter. It's worth mentioning that Phil Frohlich'sPrescott Group Capital Managementcut the largest investment of all the hedgies followed by Insider Monkey, valued at close to $1.2 million in stock. Peter Algert and Kevin Coldiron's fund,Algert Coldiron Investors, also said goodbye to its stock, about $1.2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 5 funds in the third quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Unit Corporation (NYSE:UNT) but similarly valued. We will take a look at Delek Logistics Partners LP (NYSE:DKL), Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), Regis Corporation (NYSE:RGS), and CymaBay Therapeutics Inc (NASDAQ:CBAY). This group of stocks' market caps resemble UNT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DKL,1,3067,-1 RCKT,13,212219,-1 RGS,15,293013,3 CBAY,29,407226,2 Average,14.5,228881,0.75 [/table]
View table hereif 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 $229 million. That figure was $15 million in UNT's case. CymaBay Therapeutics Inc (NASDAQ:CBAY) is the most popular stock in this table. On the other hand Delek Logistics Partners LP (NYSE:DKL) is the least popular one with only 1 bullish hedge fund positions. Unit Corporation (NYSE:UNT) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately UNT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); UNT investors were disappointed as the stock returned -40.8% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Should You Like CITIC Limited’s (HKG:267) High Return On Capital Employed?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
Today we'll look at CITIC Limited (HKG:267) and reflect on its potential as an investment. Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires.
First, we'll go over how we calculate ROCE. Second, we'll look at its ROCE compared to similar companies. Then we'll determine how its current liabilities are affecting its ROCE.
ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. All else being equal, a better business will have a higher ROCE. In brief, it is a useful tool, but it is not without drawbacks. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'.
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for CITIC:
0.063 = HK$246b ÷ (HK$7.7t - HK$3.8t) (Based on the trailing twelve months to December 2018.)
Therefore,CITIC has an ROCE of 6.3%.
Check out our latest analysis for CITIC
ROCE is commonly used for comparing the performance of similar businesses. In our analysis, CITIC's ROCE is meaningfully higher than the 3.7% average in the Industrials industry. We would consider this a positive, as it suggests it is using capital more effectively than other similar companies. Setting aside the industry comparison for now, CITIC's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Investors may wish to consider higher-performing investments.
The image below shows how CITIC's ROCE compares to its industry, and you can click it to see more detail on its past growth.
It is important to remember that ROCE shows past performance, and is not necessarily predictive. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is only a point-in-time measure. Future performance is what matters, and you can see analyst predictions in ourfreereport on analyst forecasts for the company.
Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. Due to the way ROCE is calculated, a high level of current liabilities makes a company look as though it has less capital employed, and thus can (sometimes unfairly) boost the ROCE. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
CITIC has total liabilities of HK$3.8t and total assets of HK$7.7t. Therefore its current liabilities are equivalent to approximately 49% of its total assets. CITIC has a medium level of current liabilities, which would boost its ROCE somewhat.
Unfortunately, its ROCE is still uninspiring, and there are potentially more attractive prospects out there. Of course,you might find a fantastic investment by looking at a few good candidates.So take a peek at thisfreelist of companies with modest (or no) debt, trading on a P/E below 20.
For those who like to findwinning investmentsthisfreelist of growing companies with recent insider purchasing, could be just the ticket.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Here is What Hedge Funds Think About Intellia Therapeutics, Inc. (NTLA)
It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 18.7% so far in 2019 and outperformed the S&P 500 ETF by 6.6 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards Intellia Therapeutics, Inc. (NASDAQ:NTLA) changed during the first quarter.
Hedge fund interest inIntellia Therapeutics, Inc. (NASDAQ:NTLA)shares was flat at the end of last quarter. This is usually a negative indicator. 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 Federal Agricultural Mortgage Corp. (NYSE:AGM), NCI Building Systems, Inc. (NYSE:NCS), and Carolina Financial Corporation (NASDAQ:CARO) to gather more data points.
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 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.
Let's analyze the new hedge fund action surrounding Intellia Therapeutics, Inc. (NASDAQ:NTLA).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in NTLA a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey,OrbiMed Advisors, managed by Samuel Isaly, holds the number one position in Intellia Therapeutics, Inc. (NASDAQ:NTLA). OrbiMed Advisors has a $6.4 million position in the stock, comprising 0.1% of its 13F portfolio. On OrbiMed Advisors's heels is Julian Baker and Felix Baker ofBaker Bros. Advisors, with a $2.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions contain Kerr Neilson'sPlatinum Asset Management, Ken Griffin'sCitadel Investment Groupand Gilchrist Berg'sWater Street Capital.
Due to the fact that Intellia Therapeutics, Inc. (NASDAQ:NTLA) has experienced declining sentiment from hedge fund managers, it's safe to say that there was a specific group of fund managers who sold off their full holdings in the third quarter. At the top of the heap, Jim Simons'sRenaissance Technologiescut the largest position of the "upper crust" of funds monitored by Insider Monkey, totaling close to $3.1 million in stock, and Peter Muller's PDT Partners was right behind this move, as the fund said goodbye to about $1.2 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 - not necessarily in the same industry as Intellia Therapeutics, Inc. (NASDAQ:NTLA) but similarly valued. These stocks are Federal Agricultural Mortgage Corp. (NYSE:AGM), NCI Building Systems, Inc. (NYSE:NCS), Carolina Financial Corporation (NASDAQ:CARO), and Franklin Street Properties Corp. (NYSEAMEX:FSP). All of these stocks' market caps are similar to NTLA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AGM,9,26105,0 NCS,17,65728,-3 CARO,7,47137,-1 FSP,8,30774,-7 Average,10.25,42436,-2.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $17 million in NTLA's case. NCI Building Systems, Inc. (NYSE:NCS) is the most popular stock in this table. On the other hand Carolina Financial Corporation (NASDAQ:CARO) is the least popular one with only 7 bullish hedge fund positions. Intellia Therapeutics, Inc. (NASDAQ:NTLA) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NTLA wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); NTLA investors were disappointed as the stock returned -13.3% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About TrustCo Bank Corp NY (TRST)
It was a rough fourth quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 18.7% so far in 2019 and outperformed the S&P 500 ETF by 6.6 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards TrustCo Bank Corp NY (NASDAQ:TRST) changed during the first quarter.
TrustCo Bank Corp NY (NASDAQ:TRST)has experienced an increase in activity from the world's largest hedge funds in recent months. Our calculations also showed that TRST isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to take a peek at the latest hedge fund action surrounding TrustCo Bank Corp NY (NASDAQ:TRST).
At Q1's end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TRST over the last 15 quarters. With hedge funds' sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey,Royce & Associates, managed by Chuck Royce, holds the number one position in TrustCo Bank Corp NY (NASDAQ:TRST). Royce & Associates has a $22.6 million position in the stock, comprising 0.2% of its 13F portfolio. Coming in second is Jim Simons ofRenaissance Technologies, with a $12.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism contain Israel Englander'sMillennium Management, Cliff Asness'sAQR Capital Managementand Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capital.
As aggregate interest increased, key money managers have been driving this bullishness.Laurion Capital Management, managed by Benjamin A. Smith, created the biggest position in TrustCo Bank Corp NY (NASDAQ:TRST). Laurion Capital Management had $0.1 million invested in the company at the end of the quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as TrustCo Bank Corp NY (NASDAQ:TRST) but similarly valued. We will take a look at Ameresco Inc (NYSE:AMRC), Oritani Financial Corp. (NASDAQ:ORIT), Meridian Bioscience, Inc. (NASDAQ:VIVO), and Wabash National Corporation (NYSE:WNC). This group of stocks' market valuations are closest to TRST's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMRC,10,30678,3 ORIT,7,36842,-1 VIVO,16,83869,-2 WNC,16,67949,-4 Average,12.25,54835,-1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $47 million in TRST's case. Meridian Bioscience, Inc. (NASDAQ:VIVO) is the most popular stock in this table. On the other hand Oritani Financial Corp. (NASDAQ:ORIT) is the least popular one with only 7 bullish hedge fund positions. TrustCo Bank Corp NY (NASDAQ:TRST) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TRST wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TRST investors were disappointed as the stock returned -2.1% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been More Bullish On Ameresco Inc (AMRC)
Is Ameresco Inc (NYSE:AMRC) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Ameresco Inc (NYSE:AMRC)has seen an increase in support from the world's most elite money managers recently. Our calculations also showed that AMRC isn't among the30 most popular stocks among hedge funds.
In the financial world there are a lot of gauges market participants employ to appraise their holdings. A duo of the most underrated gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outperform the S&P 500 by a significant margin (see the details here).
We're going to take a glance at the new hedge fund action surrounding Ameresco Inc (NYSE:AMRC).
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AMRC over the last 15 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 Ameresco Inc (NYSE:AMRC) was held byRoyce & Associates, which reported holding $11.8 million worth of stock at the end of March. It was followed by Bandera Partners with a $6.5 million position. Other investors bullish on the company included Driehaus Capital, Renaissance Technologies, and Marshall Wace LLP.
As one would reasonably expect, key money managers were breaking ground themselves.Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in Ameresco Inc (NYSE:AMRC). Marshall Wace LLP had $1.8 million invested in the company at the end of the quarter. Israel Englander'sMillennium Managementalso initiated a $0.6 million position during the quarter. The only other fund with a new position in the stock is Gavin Saitowitz and Cisco J. del Valle'sSpringbok Capital.
Let's now review hedge fund activity in other stocks similar to Ameresco Inc (NYSE:AMRC). We will take a look at Oritani Financial Corp. (NASDAQ:ORIT), Meridian Bioscience, Inc. (NASDAQ:VIVO), Wabash National Corporation (NYSE:WNC), and NV5 Global, Inc. (NASDAQ:NVEE). This group of stocks' market valuations match AMRC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ORIT,7,36842,-1 VIVO,16,83869,-2 WNC,16,67949,-4 NVEE,10,25194,-3 Average,12.25,53464,-2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $31 million in AMRC's case. Meridian Bioscience, Inc. (NASDAQ:VIVO) is the most popular stock in this table. On the other hand Oritani Financial Corp. (NASDAQ:ORIT) is the least popular one with only 7 bullish hedge fund positions. Ameresco Inc (NYSE:AMRC) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately AMRC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); AMRC investors were disappointed as the stock returned -11.1% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About NV5 Holdings Inc (NVEE)
Hedge funds and other investment firms run by legendary investors like Israel Englander, Jeffrey Talpins and Ray Dalio are entrusted to manage billions of dollars of accredited investors' money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
NV5 Holdings Inc (NASDAQ:NVEE)was in 10 hedge funds' portfolios at the end of March. NVEE shareholders have witnessed a decrease in hedge fund sentiment lately. There were 13 hedge funds in our database with NVEE positions at the end of the previous quarter. Our calculations also showed that NVEE isn't among the30 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 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.
Let's view the latest hedge fund action encompassing NV5 Holdings Inc (NASDAQ:NVEE).
At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -23% from the fourth quarter of 2018. On the other hand, there were a total of 8 hedge funds with a bullish position in NVEE 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.
According to Insider Monkey's hedge fund database,Manatuck Hill Partners, managed by Mark Broach, holds the number one position in NV5 Holdings Inc (NASDAQ:NVEE). Manatuck Hill Partners has a $9.7 million position in the stock, comprising 4.6% of its 13F portfolio. On Manatuck Hill Partners's heels isDriehaus Capital, led by Richard Driehaus, holding a $5.3 million position; 0.2% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism consist of Keith M. Rosenbloom'sCruiser Capital Advisors, Paul Hondros'sAlphaOne Capital Partnersand Brian C. Freckmann'sLyon Street Capital.
Because NV5 Holdings Inc (NASDAQ:NVEE) has experienced falling interest from the smart money, it's easy to see that there is a sect of hedgies who were dropping their entire stakes heading into Q3. Interestingly, Chuck Royce'sRoyce & Associatessold off the largest position of the 700 funds followed by Insider Monkey, valued at an estimated $1.9 million in stock, and Jim Simons's Renaissance Technologies was right behind this move, as the fund said goodbye to about $1.8 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds heading into Q3.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as NV5 Holdings Inc (NASDAQ:NVEE) but similarly valued. These stocks are Mammoth Energy Services, Inc. (NASDAQ:TUSK), NanoString Technologies Inc (NASDAQ:NSTG), DMC Global Inc. (NASDAQ:BOOM), and Party City Holdco Inc (NYSE:PRTY). All of these stocks' market caps are closest to NVEE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TUSK,17,389043,0 NSTG,22,143670,7 BOOM,14,86851,2 PRTY,19,69139,1 Average,18,172176,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $25 million in NVEE's case. NanoString Technologies Inc (NASDAQ:NSTG) is the most popular stock in this table. On the other hand DMC Global Inc. (NASDAQ:BOOM) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks NV5 Holdings Inc (NASDAQ:NVEE) is even less popular than BOOM. Hedge funds clearly dropped the ball on NVEE as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on NVEE as the stock returned 31.2% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Bryn Mawr Bank Corp. (BMTC) A Good Stock To Buy?
Is Bryn Mawr Bank Corp. (NASDAQ:BMTC) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
IsBryn Mawr Bank Corp. (NASDAQ:BMTC)a bargain? Investors who are in the know are becoming hopeful. The number of long hedge fund bets advanced by 2 in recent months. Our calculations also showed that BMTC isn't among the30 most popular stocks among hedge funds.
If you'd ask most stock holders, hedge funds are viewed as slow, old financial vehicles of yesteryear. While there are more than 8000 funds with their doors open today, Our experts hone in on the upper echelon of this club, approximately 750 funds. These money managers preside over the lion's share of the hedge fund industry's total capital, and by tailing their top equity investments, Insider Monkey has formulated many investment strategies that have historically outstripped the broader indices. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a look at the latest hedge fund action surrounding Bryn Mawr Bank Corp. (NASDAQ:BMTC).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards BMTC over the last 15 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 Bryn Mawr Bank Corp. (NASDAQ:BMTC) was held byRenaissance Technologies, which reported holding $28.6 million worth of stock at the end of March. It was followed by Polaris Capital Management with a $2.6 million position. Other investors bullish on the company included AlphaOne Capital Partners, Royce & Associates, and D E Shaw.
As industrywide interest jumped, key money managers have been driving this bullishness.Millennium Management, managed by Israel Englander, initiated the largest position in Bryn Mawr Bank Corp. (NASDAQ:BMTC). Millennium Management had $0.5 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle'sSpringbok Capitalalso initiated a $0 million position during the quarter.
Let's check out hedge fund activity in other stocks similar to Bryn Mawr Bank Corp. (NASDAQ:BMTC). These stocks are Allegiance Bancshares, Inc. (NASDAQ:ABTX), Oaktree Specialty Lending Corporation (NASDAQ:OCSL), Central Securities Corporation (NYSEAMEX:CET), and Community Trust Bancorp, Inc. (NASDAQ:CTBI). This group of stocks' market values are similar to BMTC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABTX,7,25758,1 OCSL,19,68979,7 CET,3,10638,1 CTBI,8,20202,1 Average,9.25,31394,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $36 million in BMTC's case. Oaktree Specialty Lending Corporation (NASDAQ:OCSL) is the most popular stock in this table. On the other hand Central Securities Corporation (NYSEAMEX:CET) is the least popular one with only 3 bullish hedge fund positions. Bryn Mawr Bank Corp. (NASDAQ:BMTC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately BMTC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on BMTC were disappointed as the stock returned 3.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About HomeStreet Inc (HMST)
Is HomeStreet Inc (NASDAQ:HMST) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
HomeStreet Inc (NASDAQ:HMST)investors should be aware of an increase in hedge fund interest recently.HMSTwas in 10 hedge funds' portfolios at the end of the first quarter of 2019. There were 7 hedge funds in our database with HMST positions at the end of the previous quarter. Our calculations also showed that HMST isn't among the30 most popular stocks among hedge funds.
To most stock holders, hedge funds are perceived as slow, outdated investment vehicles of the past. While there are over 8000 funds in operation today, We look at the moguls of this club, approximately 750 funds. These money managers direct the lion's share of the smart money's total asset base, and by monitoring their inimitable stock picks, Insider Monkey has deciphered numerous investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's check out the recent hedge fund action encompassing HomeStreet Inc (NASDAQ:HMST).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards HMST over the last 15 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in HomeStreet Inc (NASDAQ:HMST) was held byMillennium Management, which reported holding $3.5 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $2.7 million position. Other investors bullish on the company included Marshall Wace LLP, D E Shaw, and Manatuck Hill Partners.
As aggregate interest increased, key money managers have jumped into HomeStreet Inc (NASDAQ:HMST) headfirst.Renaissance Technologies, managed by Jim Simons, created the most valuable position in HomeStreet Inc (NASDAQ:HMST). Renaissance Technologies had $2.7 million invested in the company at the end of the quarter. Mark Broach'sManatuck Hill Partnersalso initiated a $1.5 million position during the quarter. The only other fund with a brand new HMST position is Brian C. Freckmann'sLyon Street Capital.
Let's now take a look at hedge fund activity in other stocks similar to HomeStreet Inc (NASDAQ:HMST). We will take a look at JinkoSolar Holding Co., Ltd. (NYSE:JKS), Rudolph Technologies Inc (NYSE:RTEC), Voyager Therapeutics, Inc. (NASDAQ:VYGR), and Eagle Pharmaceuticals Inc (NASDAQ:EGRX). This group of stocks' market values are similar to HMST's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JKS,6,5725,0 RTEC,12,82738,-2 VYGR,18,153216,0 EGRX,23,164998,2 Average,14.75,101669,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $16 million in HMST's case. Eagle Pharmaceuticals Inc (NASDAQ:EGRX) is the most popular stock in this table. On the other hand JinkoSolar Holding Co., Ltd. (NYSE:JKS) is the least popular one with only 6 bullish hedge fund positions. HomeStreet Inc (NASDAQ:HMST) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on HMST as the stock returned 16.6% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Hedge Funds Think About ConnectOne Bancorp Inc (CNOB)
Is ConnectOne Bancorp Inc (NASDAQ: CNOB ) 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. ConnectOne Bancorp Inc (NASDAQ: CNOB ) investors should be aware of a decrease in hedge fund sentiment of late. CNOB was in 10 hedge funds' portfolios at the end of the first quarter of 2019. There were 12 hedge funds in our database with CNOB positions at the end of the previous quarter. Our calculations also showed that CNOB isn't among the 30 most popular stocks among hedge funds . 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 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. Matthew Lindenbaum Basswood Capital We're going to take a look at the new hedge fund action regarding ConnectOne Bancorp Inc (NASDAQ: CNOB ). What does smart money think about ConnectOne Bancorp Inc (NASDAQ:CNOB)? At Q1's end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in CNOB a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves. Story continues CNOB_jun2019 According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons's Renaissance Technologies has the most valuable position in ConnectOne Bancorp Inc (NASDAQ:CNOB), worth close to $20.8 million, corresponding to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies's heels is Seidman Investment Partnership , led by Lawrence Seidman, holding a $7.7 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Remaining peers that are bullish contain Matthew Lindenbaum's Basswood Capital , D. E. Shaw's D E Shaw and Paul Marshall and Ian Wace's Marshall Wace LLP . Because ConnectOne Bancorp Inc (NASDAQ:CNOB) has witnessed bearish sentiment from hedge fund managers, logic holds that there is a sect of money managers who were dropping their full holdings by the end of the third quarter. Interestingly, Anton Schutz's Mendon Capital Advisors dumped the biggest investment of all the hedgies followed by Insider Monkey, comprising an estimated $3.2 million in stock, and Andrew Feldstein and Stephen Siderow's Blue Mountain Capital was right behind this move, as the fund sold off about $0.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 2 funds by the end of the third quarter. Let's check out hedge fund activity in other stocks similar to ConnectOne Bancorp Inc (NASDAQ:CNOB). These stocks are Lindblad Expeditions Holdings Inc (NASDAQ: LIND ), TrueCar Inc (NASDAQ: TRUE ), Revance Therapeutics Inc (NASDAQ: RVNC ), and Northfield Bancorp Inc (NASDAQ: NFBK ). This group of stocks' market values are similar to CNOB's market value. [table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LIND,20,156753,6 TRUE,17,166148,2 RVNC,12,24975,3 NFBK,5,32141,1 Average,13.5,95004,3 [/table] View table here if you experience formatting issues. As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $41 million in CNOB's case. Lindblad Expeditions Holdings Inc (NASDAQ: LIND ) is the most popular stock in this table. On the other hand Northfield Bancorp Inc (NASDAQ: NFBK ) is the least popular one with only 5 bullish hedge fund positions. ConnectOne Bancorp Inc (NASDAQ:CNOB) 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on CNOB as the stock returned 13.8% during the same time frame and outperformed the market by an even larger margin. Disclosure: None. This article was originally published at Insider Monkey . Related Content How to Best Use Insider Monkey To Increase Your Returns Billionaire Ken Fisher’s Top Dividend Stock Picks 30 Stocks Billionaires Are Crazy About: Insider Monkey Billionaire Stock Index
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Here’s What Hedge Funds Think About Nine Energy Service, Inc. (NINE)
A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31, so let’s proceed with the discussion of the hedge fund sentiment on Nine Energy Service, Inc. (NYSE:NINE).
Hedge fund interest inNine Energy Service, Inc. (NYSE:NINE)shares was flat at the end of last quarter. This is usually a negative indicator. 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 United Insurance Holdings Corp.(NDA) (NASDAQ:UIHC), Fossil Group Inc (NASDAQ:FOSL), and Sabine Royalty Trust (NYSE:SBR) to gather more data points.
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.
Let's take a look at the recent hedge fund action regarding Nine Energy Service, Inc. (NYSE:NINE).
At Q1's end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in NINE over the last 15 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database,Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in Nine Energy Service, Inc. (NYSE:NINE). Adage Capital Management has a $20.5 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager isEncompass Capital Advisors, managed by Todd J. Kantor, which holds a $13.7 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism consist of Richard Driehaus'sDriehaus Capital, Jim Simons'sRenaissance Technologiesand Arvind Sanger'sGeoSphere Capital Management.
Judging by the fact that Nine Energy Service, Inc. (NYSE:NINE) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there was a specific group of money managers that elected to cut their positions entirely in the third quarter. It's worth mentioning that D. E. Shaw'sD E Shawcut the biggest stake of all the hedgies followed by Insider Monkey, worth about $1.3 million in stock. Ken Griffin's fund,Citadel Investment Group, also dumped its stock, about $0.2 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Nine Energy Service, Inc. (NYSE:NINE) but similarly valued. These stocks are United Insurance Holdings Corp. (NASDAQ:UIHC), Fossil Group Inc (NASDAQ:FOSL), Sabine Royalty Trust (NYSE:SBR), and Rayonier Advanced Materials Inc (NYSE:RYAM). This group of stocks' market values are similar to NINE's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UIHC,7,8100,1 FOSL,17,80499,-1 SBR,6,24252,0 RYAM,24,142317,5 Average,13.5,63792,1.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $43 million in NINE's case. Rayonier Advanced Materials Inc (NYSE:RYAM) is the most popular stock in this table. On the other hand Sabine Royalty Trust (NYSE:SBR) is the least popular one with only 6 bullish hedge fund positions. Nine Energy Service, Inc. (NYSE:NINE) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NINE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); NINE investors were disappointed as the stock returned -23.8% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been More Bullish On Axonics Modulation Technologies, Inc. (AXNX)
Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by nearly 9 percentage points since the end of the third quarter of 2018 as investors worried over the possible ramifications of rising interest rates and escalation of the trade war with China. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor (i.e. only 298 S&P 500 constituents were among the 500 most popular stocks among hedge funds), and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) and see how the stock is affected by the recent hedge fund activity.
Hedge fund interest inAxonics Modulation Technologies, Inc. (NASDAQ:AXNX)shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare AXNX to other stocks including QuinStreet Inc (NASDAQ:QNST), Urstadt Biddle Properties Inc. (NYSE:UBP), and Penn Virginia Corporation (NASDAQ:PVAC) to get a better sense of its popularity.
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.
Let's check out the latest hedge fund action encompassing Axonics Modulation Technologies, Inc. (NASDAQ:AXNX).
At Q1's end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in AXNX a year ago. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds,Cormorant Asset Managementheld the most valuable stake in Axonics Modulation Technologies, Inc. (NASDAQ:AXNX), which was worth $30.5 million at the end of the first quarter. On the second spot was Perceptive Advisors which amassed $16.4 million worth of shares. Moreover, Redmile Group, Millennium Management, and Rock Springs Capital Management were also bullish on Axonics Modulation Technologies, Inc. (NASDAQ:AXNX), allocating a large percentage of their portfolios to this stock.
Due to the fact that Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) has witnessed a decline in interest from the smart money, it's easy to see that there lies a certain "tier" of fund managers who sold off their positions entirely by the end of the third quarter. Interestingly, Steve Cohen'sPoint72 Asset Managementsold off the biggest position of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $4.3 million in stock. David Lohman's fund,Diag Capital, also sold off its stock, about $0.7 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) but similarly valued. We will take a look at QuinStreet Inc (NASDAQ:QNST), Urstadt Biddle Properties Inc. (NYSE:UBP), Penn Virginia Corporation (NASDAQ:PVAC), and CorePoint Lodging Inc. (NYSE:CPLG). This group of stocks' market valuations match AXNX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position QNST,25,200135,-2 UBP,2,12578,0 PVAC,17,167038,1 CPLG,13,39801,-3 Average,14.25,104888,-1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $105 million. That figure was $85 million in AXNX's case. QuinStreet Inc (NASDAQ:QNST) is the most popular stock in this table. On the other hand Urstadt Biddle Properties Inc. (NYSE:UBP) is the least popular one with only 2 bullish hedge fund positions. Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on AXNX as the stock returned 50.4% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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What Does ENN Energy Holdings Limited's (HKG:2688) P/E Ratio Tell You?
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This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to ENN Energy Holdings Limited's (HKG:2688), to help you decide if the stock is worth further research.What is ENN Energy Holdings's P/E ratio?Well, based on the last twelve months it is 26.07. That corresponds to an earnings yield of approximately 3.8%.
See our latest analysis for ENN Energy Holdings
Theformula for P/Eis:
Price to Earnings Ratio = Share Price (in reporting currency) ÷ Earnings per Share (EPS)
Or for ENN Energy Holdings:
P/E of 26.07 = CN¥66.82(Note: this is the share price in the reporting currency, namely, CNY )÷ CN¥2.56 (Based on the year to December 2018.)
A higher P/E ratio means that investors are payinga higher pricefor each HK$1 of company earnings. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
P/E ratios primarily reflect market expectations around earnings growth rates. Earnings growth means that in the future the 'E' will be higher. That means unless the share price increases, the P/E will reduce in a few years. A lower P/E should indicate the stock is cheap relative to others -- and that may attract buyers.
ENN Energy Holdings shrunk earnings per share by 1.0% last year. But EPS is up 17% over the last 5 years.
The P/E ratio essentially measures market expectations of a company. You can see in the image below that the average P/E (17.3) for companies in the gas utilities industry is lower than ENN Energy Holdings's P/E.
Its relatively high P/E ratio indicates that ENN Energy Holdings shareholders think it will perform better than other companies in its industry classification. The market is optimistic about the future, but that doesn't guarantee future growth. So investors should delve deeper. I like to checkif company insiders have been buying or selling.
One drawback of using a P/E ratio is that it considers market capitalization, but not the balance sheet. That means it doesn't take debt or cash into account. Hypothetically, a company could reduce its future P/E ratio by spending its cash (or taking on debt) to achieve higher earnings.
While growth expenditure doesn't always pay off, the point is that it is a good option to have; but one that the P/E ratio ignores.
Net debt totals 16% of ENN Energy Holdings's market cap. It would probably deserve a higher P/E ratio if it was net cash, since it would have more options for growth.
ENN Energy Holdings has a P/E of 26.1. That's higher than the average in the HK market, which is 10.9. With modest debt but no EPS growth in the last year, it's fair to say the P/E implies some optimism about future earnings, from the market.
Investors have an opportunity when market expectations about a stock are wrong. People often underestimate remarkable growth -- so investors can make money when fast growth is not fully appreciated. So thisfreevisualization of the analyst consensus on future earningscould help you make theright decisionabout whether to buy, sell, or hold.
You might be able to find a better buy than ENN Energy Holdings. If you want a selection of possible winners, check out thisfreelist of interesting companies that trade on a P/E below 20 (but have proven they can grow earnings).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Democratic Presidential Candidates Defend Kamala Harris Amid “Racist And Ugly” Attacks
Click here to read the full article. A growing number of 2020 presidential candidates are voicing support for Sen. Kamala Harris following racist attacks claiming the California Democrat doesn’t represent African-Americans because her father was born in Jamaica. The attacks began to flood Twitter Thursday, following Harris’ breakout performance on the second night of the Democratic debate when she challenged former Vice President Joe Biden’s record on race . Related stories 'The Late Show With Stephen Colbert' Sees Kamala Harris Admit Impeachment Is Unlikely Democratic Debate Night 2 Viewership Hits All-Time Debate High For Party Of FDR, JFK & HRC - Update Democratic Debate Night 2 Review: Joe Biden Takes A Beating But Keeps On Tickin', Kamala Harris Comes Out Swinging On NBC Stage They gained momentum after Donald Trump Jr. — President Trump’s eldest son — retweeted, then deleted, a post from right-wing commentator, Ali Alexander. “Kamala Harris is *not* an American Black. She is half Indian and half Jamaican,” Alexander wrote Thursday night . “I’m so sick of people robbing American Blacks (like myself) of our history. It’s disgusting. Now using it for debate time at #DemDebate2?” Trump Jr. added the comment: “Is this true? Wow.” While the post is no longer on Trump’s timeline, several websites — including HuffPost — made screen shots of it. Harris, a former California attorney general is the biracial daughter of a Jamaican father and Indian mother. Before attending law school, she earned a bachelor’s degree from historically black Howard University, and pledged Alpha Kappa Alpha, the nation’s oldest black sorority. Her race has been questioned repeatedly since she entered the presidential contest. As of Saturday afternoon, Harris had not responded to these latest attacks, but her 2020 Democratic challengers did. “The attacks against @KamalaHarris are racist and ugly,” tweeted Sen. Elizabeth Warren (D-Mass.). “We all have an obligation to speak out and say so. And it’s within the power and obligation of tech companies to stop these vile lies dead in their tracks.” Sen. Cory Booker (D-New Jersey) added : “@KamalaHarris doesn’t have s–t to prove.” Meanwhile, South Bend, Indiana Mayor Pete Buttigieg tweeted : “The presidential competitive field is stronger because Kamala Harris has been powerfully voicing her Black American experience. Her first-generation story embodies the American dream. It’s long past time to end these racist, birther-style attacks.” Story continues Despite the social media assault, fueled by bots and trolls, Harris’ campaign has surged since the debate. Today, the campaign reported it raised more than $2 million online in the first 24 hours after Thursday’s debate. “Supporters across this country are fueling our campaign because they saw her empathy, her passion, and her direct focus on the issues that keep people up at night,” Lily Adams, the campaign’s communications director, said in a statement to CBS News. Sign up for Deadline's Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram . View comments
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Why We Like ENN Energy Holdings Limited’s (HKG:2688) 15% Return On Capital Employed
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Today we'll look at ENN Energy Holdings Limited (HKG:2688) and reflect on its potential as an investment. Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires.
Firstly, we'll go over how we calculate ROCE. Next, we'll compare it to others in its industry. Last but not least, we'll look at what impact its current liabilities have on its ROCE.
ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Generally speaking a higher ROCE is better. In brief, it is a useful tool, but it is not without drawbacks. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'.
Analysts use this formula to calculate return on capital employed:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for ENN Energy Holdings:
0.15 = CN¥6.1b ÷ (CN¥74b - CN¥33b) (Based on the trailing twelve months to December 2018.)
So,ENN Energy Holdings has an ROCE of 15%.
Check out our latest analysis for ENN Energy Holdings
ROCE is commonly used for comparing the performance of similar businesses. ENN Energy Holdings's ROCE appears to be substantially greater than the 8.5% average in the Gas Utilities industry. I think that's good to see, since it implies the company is better than other companies at making the most of its capital. Regardless of where ENN Energy Holdings sits next to its industry, its ROCE in absolute terms appears satisfactory, and this company could be worth a closer look.
You can see in the image below how ENN Energy Holdings's ROCE compares to its industry. Click to see more on past growth.
Remember that this metric is backwards looking - it shows what has happened in the past, and does not accurately predict the future. ROCE can be deceptive for cyclical businesses, as returns can look incredible in boom times, and terribly low in downturns. ROCE is only a point-in-time measure. What happens in the future is pretty important for investors, so we have prepared afreereport on analyst forecasts for ENN Energy Holdings.
Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual. To counteract this, we check if a company has high current liabilities, relative to its total assets.
ENN Energy Holdings has total assets of CN¥74b and current liabilities of CN¥33b. As a result, its current liabilities are equal to approximately 45% of its total assets. With this level of current liabilities, ENN Energy Holdings's ROCE is boosted somewhat.
With a decent ROCE, the company could be interesting, but remember that the level of current liabilities make the ROCE look better. There might be better investments than ENN Energy Holdings out there,but you will have to work hard to find them. These promising businesses withrapidly growing earningsmight be right up your alley.
I will like ENN Energy Holdings better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Here's Why We Think Ascott Residence Trust (SGX:A68U) Is Well Worth Watching
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested inAscott Residence Trust(SGX:A68U). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
Check out our latest analysis for Ascott Residence Trust
As one of my mentors once told me, share price follows earnings per share (EPS). That means EPS growth is considered a real positive by most successful long-term investors. We can see that in the last three years Ascott Residence Trust grew its EPS by 6.3% per year. While that sort of growth rate isn't amazing, it does show the business is growing.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Ascott Residence Trust maintained stable EBIT margins over the last year, all while growing revenue 3.9% to S$517m. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
Fortunately, we've got access to analyst forecasts of Ascott Residence Trust'sfutureprofits. You can do your own forecasts without looking, or you cantake a peek at what the professionals are predicting.
I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that Ascott Residence Trust insiders have a significant amount of capital invested in the stock. To be specific, they have S$30m worth of shares. That shows significant buy-in, and may indicate conviction in the business strategy. Even though that's only about 1.1% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.
As I already mentioned, Ascott Residence Trust is a growing business, which is what I like to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusivediscounted cashflow valuationof Ascott Residence Trust. You might benefit from giving it a glance today.
Of course, you can do well (sometimes) buying stocks thatare notgrowing earnings anddo nothave insiders buying shares. But as a growth investor I always like to check out companies thatdohave those features. You can accessa free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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A Look At The Fair Value Of Greentown Service Group Co. Ltd. (HKG:2869)
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How far off is Greentown Service Group Co. Ltd. (HKG:2869) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to their present value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
Check out our latest analysis for Greentown Service Group
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (CN\u00a5, Millions)", "2019": "CN\u00a5445.23", "2020": "CN\u00a5998.99", "2021": "CN\u00a5875.18", "2022": "CN\u00a5799.44", "2023": "CN\u00a5755.81", "2024": "CN\u00a5731.48", "2025": "CN\u00a5719.40", "2026": "CN\u00a5715.40", "2027": "CN\u00a5716.91", "2028": "CN\u00a5722.29"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x4", "2021": "Analyst x2", "2022": "Est @ -8.65%", "2023": "Est @ -5.46%", "2024": "Est @ -3.22%", "2025": "Est @ -1.65%", "2026": "Est @ -0.56%", "2027": "Est @ 0.21%", "2028": "Est @ 0.75%"}, {"": "Present Value (CN\u00a5, Millions) Discounted @ 6.77%", "2019": "CN\u00a5416.99", "2020": "CN\u00a5876.30", "2021": "CN\u00a5719.01", "2022": "CN\u00a5615.14", "2023": "CN\u00a5544.69", "2024": "CN\u00a5493.72", "2025": "CN\u00a5454.77", "2026": "CN\u00a5423.57", "2027": "CN\u00a5397.55", "2028": "CN\u00a5375.12"}]
Present Value of 10-year Cash Flow (PVCF)= CN¥5.32b
"Est" = FCF growth rate estimated by Simply Wall St
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 10-year government bond rate (2%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.8%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = CN¥722m × (1 + 2%) ÷ (6.8% – 2%) = CN¥15b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥CN¥15b ÷ ( 1 + 6.8%)10= CN¥8.03b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥13.34b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. This results in an intrinsic value estimate in the company’s reported currency of CN¥4.8. However, 2869’s primary listing is in China, and 1 share of 2869 in CNY represents 1.137 ( CNY/ HKD) share of SEHK:2869,so the intrinsic value per share in HKD is HK$5.46.Relative to the current share price of HK$6.31, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Greentown Service Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.8%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Whilst important, DCF calculation shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Greentown Service Group, I've put together three important factors you should further research:
1. Financial Health: Does 2869 have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does 2869's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of 2869? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the HKG every day. If you want to find the calculation for other stocks justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Is Now The Time To Put Galaxy Entertainment Group (HKG:27) On Your Watchlist?
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Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
So if you're like me, you might be more interested in profitable, growing companies, likeGalaxy Entertainment Group(HKG:27). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
See our latest analysis for Galaxy Entertainment Group
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Who among us would not applaud Galaxy Entertainment Group's stratospheric annual EPS growth of 47%, compound, over the last three years? While that sort of growth rate isn't sustainable for long, it certainly catches my attention; like a glint in the eye of my lover.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note Galaxy Entertainment Group's EBIT margins were flat over the last year, revenue grew by a solid 14% to HK$55b. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
In investing, as in life, the future matters more than the past. So why not check out thisfreeinteractive visualization of Galaxy Entertainment Group'sforecastprofits?
We would not expect to see insiders owning a large percentage of a HK$228b company like Galaxy Entertainment Group. But we are reassured by the fact they have invested in the company. Notably, they have an enormous stake in the company, worth HK$26b. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!
Galaxy Entertainment Group's earnings per share have taken off like a rocket aimed right at the moon. That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So to my mind Galaxy Entertainment Group is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Now, you could try to make up your mind on Galaxy Entertainment Group by focusing on just these factors,oryou couldalsoconsider how its price-to-earnings ratio compares to other companies in its industry.
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here isa list of companies with insider buying in the last three months.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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What Percentage Of Great Eagle Holdings Limited (HKG:41) Shares Do Insiders Own?
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Every investor in Great Eagle Holdings Limited (HKG:41) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
Great Eagle Holdings isn't enormous, but it's not particularly small either. It has a market capitalization of HK$23b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholder can tell us about 41.
See our latest analysis for Great Eagle Holdings
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Great Eagle Holdings already has institutions on the share registry. Indeed, they own 15% of the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Great Eagle Holdings's earnings history, below. Of course, the future is what really matters.
Hedge funds don't have many shares in Great Eagle Holdings. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in Great Eagle Holdings Limited. Insiders own HK$6.0b worth of shares in the HK$23b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You canclick here to see if those insiders have been buying or selling.
The general public, with a 17% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Our data indicates that Private Companies hold 42%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I always like to check for ahistory of revenue growth. You can too, by accessing this free chart ofhistoric revenue and earnings in thisdetailed graph.
Ultimatelythe future is most important. You can access thisfreereport on analyst forecasts for the company.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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A Partner at Binance Labs Expresses Optimism Over Facebook’s Entry Into Crypto With Libra
Speaking to Cointelegraph atBlockchainWeek Rome, Teck Chei, partner atBinanceLabs, said that he seesFacebook’sLibraProject at a step forward for crypto and increasing public awareness.
In Chei’s own words:
“I think having a company like Facebook, with such tremendous reach and distribution, into all different countries around the world – having them be interested in cryptocurrency and launching one is a very very positive thing for our industry. It brings a ton of awareness to people who have never heard of cryptocurrency.”
Binance is one of the largestcryptocurrencyexchangesin the world at present. Binance Labs are the company’s venture arm.
Regarding concerns over Facebook’s use of crypto representing a step towards centralization, Chei remarked that they are one of 100 founders of Project Libra.
Binance and Facebook will be able to work together, Chei predicted:
“We naturally will engage with Facebook to kind of see how we can help advance the industry together.”
Facebook’s Libra project has been subject to no small amount of criticism, both fromgovernmentssuspicious of Facebook’s data use and from die-hard crypto followers concerned about centralization.
In the United States, Libra will be the subject ofCongressionalhearingsin July over concerns that Libra cryptocurrency will pose a threat tosecurity. Afterbriefingson the subject last week, Representative Emanuel Cleaver II reportedly commented that
“We’ve seen the significant damage that foreign adversaries and bad actors have wrought on our democracy through Facebook’s platform, and that was simply through messaging and advertising.”
Chei’s commentary comes on the heels of Gin Chao’s statement that Binance was engaged in official discussions with Facebook, as Cointelegraphreportedon June 28. Chao said that Binance was “looking forward to working with libra as much as we can.”
Earlier in June, Binanceannouncedthat the exchange would stop serving clients based in the United States in September as they configure a U.S.-dedicated platform.
• Binance Discussing Libra With Facebook, Exchange Exec Reveals
• Australian Reserve Bank Official Advises Caution in Anticipation of Libra
• KuCoin Lists Binance Coin, Supports Binance Chain Projects
• Reserve Bank of India Developing Blockchain Banking Platform
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What Are Analysts Saying About CIMC Enric Holdings Limited's (HKG:3899) Earnings Trajectory?
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CIMC Enric Holdings Limited's (HKG:3899) latest earnings update in April 2019 showed that the business gained from a strong tailwind, eventuating to a high double-digit earnings growth of 87%. Investors may find it useful to understand how market analysts perceive CIMC Enric Holdings's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for CIMC Enric Holdings
Analysts' expectations for next year seems positive, with earnings growing by a robust 22%. This growth seems to continue into the following year with rates reaching double digit 41% compared to today’s earnings, and finally hitting CN¥1.3b by 2022.
While it is useful to understand the rate of growth year by year relative to today’s figure, it may be more insightful to analyze the rate at which the company is growing every year, on average. The benefit of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of CIMC Enric Holdings's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 16%. This means that, we can expect CIMC Enric Holdings will grow its earnings by 16% every year for the next couple of years.
For CIMC Enric Holdings, there are three relevant factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is 3899 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether 3899 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 3899? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Why You Should Like CIMC Enric Holdings Limited’s (HKG:3899) ROCE
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Today we'll evaluate CIMC Enric Holdings Limited (HKG:3899) to determine whether it could have potential as an investment idea. To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business.
Firstly, we'll go over how we calculate ROCE. Next, we'll compare it to others in its industry. Last but not least, we'll look at what impact its current liabilities have on its ROCE.
ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. All else being equal, a better business will have a higher ROCE. Overall, it is a valuable metric that has its flaws. Author Edwin Whitingsaysto be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.'
The formula for calculating the return on capital employed is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for CIMC Enric Holdings:
0.14 = CN¥1.1b ÷ (CN¥16b - CN¥8.1b) (Based on the trailing twelve months to December 2018.)
Therefore,CIMC Enric Holdings has an ROCE of 14%.
See our latest analysis for CIMC Enric Holdings
One way to assess ROCE is to compare similar companies. CIMC Enric Holdings's ROCE appears to be substantially greater than the 10% average in the Machinery industry. We consider this a positive sign, because it suggests it uses capital more efficiently than similar companies. Regardless of where CIMC Enric Holdings sits next to its industry, its ROCE in absolute terms appears satisfactory, and this company could be worth a closer look.
In our analysis, CIMC Enric Holdings's ROCE appears to be 14%, compared to 3 years ago, when its ROCE was 8.5%. This makes us think the business might be improving. You can click on the image below to see (in greater detail) how CIMC Enric Holdings's past growth compares to other companies.
When considering ROCE, bear in mind that it reflects the past and does not necessarily predict the future. Companies in cyclical industries can be difficult to understand using ROCE, as returns typically look high during boom times, and low during busts. ROCE is, after all, simply a snap shot of a single year. Future performance is what matters, and you can see analyst predictions in ourfreereport on analyst forecasts for the company.
Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
CIMC Enric Holdings has total assets of CN¥16b and current liabilities of CN¥8.1b. As a result, its current liabilities are equal to approximately 51% of its total assets. This is admittedly a high level of current liabilities, improving ROCE substantially.
The ROCE would not look as appealing if the company had fewer current liabilities. CIMC Enric Holdings shapes up well under this analysis,but it is far from the only business delivering excellent numbers. You might also want to check thisfreecollection of companies delivering excellent earnings growth.
I will like CIMC Enric Holdings better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Tens of thousands join gay pride parades around the world
MEXICO CITY (AP) Tens of thousands of people turned out for gay pride celebrations around the world on Saturday, including a boisterous party in Mexico and the first pride march in North Macedonia's capital. Rainbow flags and umbrellas swayed and music pounded as the march along Mexico City's Paseo de la Reforma avenue got underway, with couples, families and activists seeking to raise visibility for sexual diversity in the country. Same-sex civil unions have been legal in Mexico City since 2007, and gay marriage since 2009. A handful of Mexican states have also legalized same-sex unions, which are supposed to be recognized nationwide. But pride participants said Mexico has a long way to go in becoming a more tolerant and accepting place for LGBTQ individuals. "There's a lot of machismo, a lot of ignorance still," said Monica Nochebuena, who identifies as bisexual. Nochebuena, 28, attended the Mexico City march for the first time with her mother and sister on Saturday, wearing a shirt that said: "My mama already knows." Her mother's shirt read: "My daughter already told me." Human rights activist Jose Luis Gutierrez, 43, said the march is about visibility, and rights, especially for Mexico's vulnerable transgender population. The Inter-American Commission on Human Rights says that poverty, exclusion and violence reduce life expectancy for trans women in the Americas to 35 years. In New York City, Friday marked the 50th anniversary of the Stonewall uprising, when a police raid on a gay bar in Manhattan led to a riot and days of demonstrations that morphed into a sustained LGBTQ liberation movement. The city's huge Pride parade on Sunday also swings past the bar. Other LGBTQ celebrations took place from India to Europe, with more events planned for Sunday. In the North Macedonian capital of Skopje, U.S. Charge d'Affaires Micaela Schweitzer-Bluhm attended the first pride march there in a festive and incident-free atmosphere despite a countermarch organized by religious and "pro-family" organizations. Story continues People from across Macedonia took part, along with marchers from neighboring Bulgaria, Greece and Serbia and other countries. "This year Skopje joined more than 70 Pride (marches) and the USA are very proud to be part of this," Schweitzer-Bluhm told reporters. "There is a lot of progress here in North Macedonia but still a lot has to be done." In Paraguay, about 2,000 people paraded through the capital some carrying signs saying "Universities Free of Homophobia" and "Equal Rights." The gay pride march came on the same day that conservative Paraguayan President Mario Abdo Benítez tweeted: "We will defend the family as the basis of society and the protection of life from conception."
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Should You Be Impressed By Tencent Holdings Limited's (HKG:700) ROE?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Tencent Holdings Limited (HKG:700).
Our data showsTencent Holdings has a return on equity of 21%for the last year. Another way to think of that is that for every HK$1 worth of equity in the company, it was able to earn HK$0.21.
View our latest analysis for Tencent Holdings
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Tencent Holdings:
21% = CN¥83b ÷ CN¥398b (Based on the trailing twelve months to March 2019.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is all the money paid into the company from shareholders, plus any earnings retained. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the profit over the last twelve months. The higher the ROE, the more profit the company is making. So, all else being equal,a high ROE is better than a low one. That means ROE can be used to compare two businesses.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As you can see in the graphic below, Tencent Holdings has a higher ROE than the average (17%) in the Interactive Media and Services industry.
That's what I like to see. We think a high ROE, alone, is usually enough to justify further research into a company. For exampleyou might checkif insiders are buying shares.
Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Although Tencent Holdings does use debt, its debt to equity ratio of 0.46 is still low. The fact that it achieved a fairly good ROE with only modest debt suggests the business might be worth putting on your watchlist. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is useful for comparing the quality of different businesses. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking thisfreereport on analyst forecasts for the company.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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What Should We Expect From Sinotruk (Hong Kong) Limited's (HKG:3808) Earnings In The Next Couple Of Years?
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Sinotruk (Hong Kong) Limited's (HKG:3808) most recent earnings update in April 2019 suggested that the company benefited from a robust tailwind, eventuating to a double-digit earnings growth of 44%. Below, I've presented key growth figures on how market analysts predict Sinotruk (Hong Kong)'s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Sinotruk (Hong Kong)
Market analysts' consensus outlook for this coming year seems pessimistic, with earnings reducing by -3.8%. Over the medium term, earnings should continue to be below today's level, with a fall of -4.6% in 2021, eventually reaching CN¥4.1b in 2022.
While it is useful to understand the growth rate each year relative to today’s figure, it may be more beneficial estimating the rate at which the earnings are growing on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Sinotruk (Hong Kong)'s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -1.6%. This means, we can presume Sinotruk (Hong Kong) will chip away at a rate of -1.6% every year for the next couple of years.
For Sinotruk (Hong Kong), I've put together three relevant factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is 3808 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether 3808 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 3808? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Is Singamas Container Holdings Limited (HKG:716) Potentially Undervalued?
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Singamas Container Holdings Limited (HKG:716), which is in the machinery business, and is based in Hong Kong, saw a double-digit share price rise of over 10% in the past couple of months on the SEHK. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Singamas Container Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Singamas Container Holdings
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 5.01x is currently trading slightly below its industry peers’ ratio of 9.18x, which means if you buy Singamas Container Holdings today, you’d be paying a reasonable price for it. And if you believe Singamas Container Holdings should be trading in this range, then there isn’t much room for the share price grow beyond where it’s currently trading. Furthermore, Singamas Container Holdings’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Singamas Container Holdings, it is expected to deliver a negative revenue growth of -3.6% over the next couple of years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
Are you a shareholder?716 seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on 716, take a look at whether its fundamentals have changed.
Are you a potential investor?If you’ve been keeping an eye on 716 for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on 716 should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Singamas Container Holdings. You can find everything you need to know about Singamas Container Holdings inthe latest infographic research report. If you are no longer interested in Singamas Container Holdings, you can use our free platform to see my list of over50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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U.S. federal court delays adoption of healthcare rule on abortion
By Katanga Johnson WASHINGTON (Reuters) - The U.S. Department of Health and Human Services (HHS) and its opponents in a California lawsuit agreed on Friday to delay implementing a rule that would allow medical workers to decline performing abortions or other treatments on moral or religious grounds, according to a federal court filing. The rule, which was due to take effect on July 22, will now be delayed for final consideration until Nov. 22, the filing said. The move comes after President Donald Trump's administration announced the rule earlier in May. It has also championed several policies to restrict abortion both in the United States and abroad. Known as the "Protecting Statutory Conscience Rights in Health Care; Delegations of Authority," the measure aims to protect conscience and religious rights surrounding abortion, sterilization and assisted suicide, HHS officials have said. Planned Parenthood and other nonprofits offering family-planning services argue that the rule, if implemented, would impose heavy costs on healthcare providers dependent on federal funding, which they could lose by refusing to comply. (Reporting by Katanga Johnson; editing by Jonathan Oatis)
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What Should We Expect From Minsheng Education Group Company Limited's (HKG:1569) Earnings In The Next Couple Of Years?
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The most recent earnings announcement Minsheng Education Group Company Limited's (HKG:1569) released in April 2019 revealed that the business experienced a robust tailwind, leading to a double-digit earnings growth of 28%. Below, I've presented key growth figures on how market analysts perceive Minsheng Education Group's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Minsheng Education Group
Analysts' outlook for the coming year seems positive, with earnings expanding by a robust 32%. This growth seems to continue into the following year with rates arriving at double digit 56% compared to today’s earnings, and finally hitting CN¥602m by 2022.
Even though it’s helpful to be aware of the rate of growth each year relative to today’s level, it may be more valuable to gauge the rate at which the business is rising or falling every year, on average. The benefit of this approach is that we can get a better picture of the direction of Minsheng Education Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 19%. This means, we can anticipate Minsheng Education Group will grow its earnings by 19% every year for the next few years.
For Minsheng Education Group, I've put together three key aspects you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is 1569 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether 1569 is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1569? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Better Buy: Palo Alto Networks vs. FireEye
Cybersecurity specialistsPalo Alto Networks(NYSE: PANW)andFireEye(NASDAQ: FEYE)enjoyed a terrific start to the year, but they have lost their momentum in recent months on the back of mixed earnings reports.
Palo Alto stock dropped after its fourth-quarter earnings guidancefailed to pass muster, while FireEye hasunderwhelmed Wall Streeteach time it has reported its results this year. But investors looking for a cybersecurity play are in luck, as one of these companies is capable of staging a turnaround, which makes the recent stock drop an opportunity to buy more shares.
Image source: Getty Images.
Palo Alto worried investors with its latest earnings report as earnings guidance was below expectations thanks to acquisition-related costs. But after removing the one-time impact of those costs and $0.02 per share attributed to the U.S.-China trade war tariffs, Palo Alto's earnings would have beenright in linewith what analysts were expecting.
Investors also took issue with the fact that Palo Alto's guidance for billings was lower than expectations. Investors need to take note of the fact that the company's contracts are now shorter in duration as clients shift to subscriptions, rather than buying licenses, and this is better for the company over the long term.
The good news is that these short-term issues have made Palo Alto Networks stock cheaper. It is trading at a price-to-sales ratio of 6.77, which is lower than its five-year average of 10.32, and also below the average multiple seen every year since 2016. This makes Palo Alto shares an attractive bet at current levels given that the company's top line and customer growth have been getting better on the back of its acquisition-driven strategy.
In fact, Palo Alto is one of the fastest-growing cybersecurity companies you can buy.
PANW Revenue (TTM)data byYCharts.
Looking ahead, Palo Alto can sustain this terrific rate of growth, as it is expanding its cybersecurity presence at a nice pace. The company's latest buys -- PureSec and Twistlock -- will expand its foothold in two more fast-growing areas.
PureSec plies its trade in the nascent serverless cybersecurity space that's expected to grow at an annual pace of almost 29%. Twistlock provides container security for cloud-native applications. This is another lucrative area that's expected to grow 33% annually through the next five years.
Such acquisitions in fast-growing verticals are the reason Palo Alto has been witnessing an increase in customer spending. Its top 25 customers spent 35% more on its products and services last quarter than in the year-ago period, which is an indication that they are buying multiple services from the company. Palo Alto's acquisitions should ensure that customers keep spending more money because they will have more options to choose from, while customers of the acquired companies can opt for its existing products.
FireEye has a habit of guiding lower than Wall Street's estimates quarter after quarter, and the trend continued the last time it released earnings. The company's Q2 revenue isexpected to increasejust 5.6% year over year, down from the 5.7% growth it recorded in Q1.
For the full year, FireEye expects revenue between $880 million and $890 million. At the midpoint of this guidance range, the company's revenue will grow less than 7%. The problem is that FireEye is looking to keep a handle on its costs, reducing spending on critical line items like research and development.
On the other hand, Palo Alto Networks is leaving no stone unturned in boosting its expenses to corner a bigger share of the cybersecurity opportunity. Palo Alto has spentover $1 billionon acquisitions in the past couple of years and its outlay on R&D has kept increasing.
PANW Research and Development Expense (TTM)data byYCharts.
Not surprisingly, Palo Alto enjoys a much better pace of growth than FireEye. What's more, despite its slower pace of growth, FireEye is more expensive than Palo Alto from a valuation perspective. It trades at nearly 48 times forward earnings estimates, while Palo Alto has a multiple of 31.6.
On the basis of growth potential and valuation, Palo Alto is a better bet when compared to FireEye.
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Harsh Chauhanhas no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Check Point Software Technologies and Palo Alto Networks. The Motley Fool recommends FireEye and Fortinet. The Motley Fool has adisclosure policy.
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What Should We Expect From Minsheng Education Group Company Limited's (HKG:1569) Earnings Over The Next Year?
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In December 2018, Minsheng Education Group Company Limited (HKG:1569) released its earnings update. Generally, the consensus outlook from analysts appear fairly confident, as a 32% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 13%. By 2020, we can expect Minsheng Education Group’s bottom line to reach CN¥439m, a jump from the current trailing-twelve-month of CN¥333m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you canresearch its fundamentals here.
Check out our latest analysis for Minsheng Education Group
Longer term expectations from the 10 analysts covering 1569’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of 1569's earnings growth over these next few years.
From the current net income level of CN¥333m and the final forecast of CN¥602m by 2022, the annual rate of growth for 1569’s earnings is 19%. EPS reaches CN¥0.15 in the final year of forecast compared to the current CN¥0.083 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 53% to 42% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Minsheng Education Group, there are three fundamental factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is Minsheng Education Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether Minsheng Education Group is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of Minsheng Education Group? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Why Lee & Man Chemical Company Limited (HKG:746) Is A Top Dividend Stock
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Could Lee & Man Chemical Company Limited (HKG:746) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.
With Lee & Man Chemical yielding 9.4% and having paid a dividend for over 10 years, many investors likely find the company quite interesting. We'd guess that plenty of investors have purchased it for the income. Some simple analysis can offer a lot of insights when buying a company for its dividend, and we'll go through this below.
Explore this interactive chart for our latest analysis on Lee & Man Chemical!
Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. In the last year, Lee & Man Chemical paid out 36% of its profit as dividends. A medium payout ratio strikes a good balance between paying dividends, and keeping enough back to invest in the business. One of the risks is that management reinvests the retained capital poorly instead of paying a higher dividend.
In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. Of the free cash flow it generated last year, Lee & Man Chemical paid out 42% as dividends, suggesting the dividend is affordable. It's positive to see that Lee & Man Chemical's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Remember, you can always get a snapshot of Lee & Man Chemical's latest financial position,by checking our visualisation of its financial health.
From the perspective of an income investor who wants to earn dividends for many years, there is not much point buying a stock if its dividend is regularly cut or is not reliable. Lee & Man Chemical has been paying dividends for a long time, but for the purpose of this analysis, we only examine the past 10 years of payments. Its dividend payments have fallen by 20% or more on at least one occasion over the past ten years. During the past ten-year period, the first annual payment was HK$0.05 in 2009, compared to HK$0.38 last year. This works out to be a compound annual growth rate (CAGR) of approximately 22% a year over that time. The growth in dividends has not been linear, but the CAGR is a decent approximation of the rate of change over this time frame.
It's not great to see that the payment has been cut in the past. We're generally more wary of companies that have cut their dividend before, as they tend to perform worse in an economic downturn.
With a relatively unstable dividend, it's even more important to evaluate if earnings per share (EPS) are growing - it's not worth taking the risk on a dividend getting cut, unless you might be rewarded with larger dividends in future. It's good to see Lee & Man Chemical has been growing its earnings per share at 23% a year over the past 5 years. With high earnings per share growth in recent times and a modest payout ratio, we think this is an attractive combination if earnings can be reinvested to generate further growth.
To summarise, shareholders should always check that Lee & Man Chemical's dividends are affordable, that its dividend payments are relatively stable, and that it has decent prospects for growing its earnings and dividend. It's great to see that Lee & Man Chemical is paying out a low percentage of its earnings and cash flow. We were also glad to see it growing earnings, but it was concerning to see the dividend has been cut at least once in the past. Overall we think Lee & Man Chemical scores well on our analysis. It's not quite perfect, but we'd definitely be keen to take a closer look.
You can also discover whether shareholders are aligned with insider interests bychecking our visualisation of insider shareholdings and trades in Lee & Man Chemical stock.
We have also put together alist of global stocks with a market capitalisation above $1bn and yielding more 3%.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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How Adobe Inc and Other Hedge Fund Favorites Performed in Q2
Insider Monkey tracks hedge funds, billionaires, and prominent value investors for a very simple reason: their consensus picks generally outperform the market. We aren’t the only research shop broadcasting this fact using a bullhorn. Here is what strategist Ben Snider said in Goldman Sachs’ periodic hedge fund report:
“Despite the strong track record of popular hedge fund stocks, investors often view high ownership as a negative trait when evaluating stock prospects. Clients often ask us to include hedge fund ownership data in stock screens, expressing a preference for buying ‘under-owned’ stocks.”
“In fact, during the past decade hedge fund popularity has been a more useful criterion for selecting stocks than valuations…. The signals from hedge fund popularity and valuation have been particularly useful in combination, especially for investors with slightly longer investment horizons. During the past decade, popular stocks have generally outperformed unpopular stocks across both 3- and 12-month investment horizons” Snider concluded.
It may sound like I am tooting my own horn, but Insider Monkey’s quarterly newsletter is actually superior to Goldman’s report. That’s because we separated the hedge fund favorites into long and short buckets. Our long bucket of hedge fund favorites returned 34.1% in the first half of 2019, whereas our short bucket of hedge fund favorites gained 21.4% during the same period. Hedge funds’ favorite top 20 stocks, on the other hand, returned 24% so far in 2019. You could have beaten the S&P 500 Index funds by 5.7 percentage points by investing inhedge funds’ top 20 picksin 2019, whereas you could have outperformed the index funds by 15.8 percentage points if you invested in our top hedge fund picks. You cantry out our newsletterfree of charge for 14 days to see hedge funds’ latest best stock picks.
The #20 most popular stock among the 743 hedge funds tracked by Insider Monkey wasAdobe Inc. (NASDAQ:ADBE).Adobe was the 16th most popular stock among hedge funds at the end of December (see the30 most popular stocks among hedge funds). Hedge funds have never been this bullish on Adobe. This is usually a very bullish signal. We observed this in other stocks like Roku,Control4 Corp, Uniqure,Avalara, Lindblad Expeditions, andDisney.Roku returnedreturned 45%, Control4 Corp returned 40%,Uniqure and Avalara delivereda 30% gain each, andDisney outperformedthe market by nearly 20 percentage points in Q2. Lindblad Expedition investors alsoexperienceda relatively modest 15.2% gain during the same period.
We have to warn you against indiscriminately imitating hedge funds' all stock picks. Hedge funds' top 20 stock picks outperformed the S&P 500 Index funds by 5.7 percentage points this year, but hedge funds' top 500 stock picks had the same return as the S&P 500 Index this quarter. Investing in a hedge fund's 35th best idea doesn't give you the same return as investing in a hedge fund's best idea.
[caption id="attachment_30602" align="aligncenter" width="489"]
Philippe Laffont of Coatue Management[/caption]
We're going to analyze the key hedge fund action encompassing Adobe Systems Incorporated (NASDAQ:ADBE).
At the end of the first quarter, a total of 86 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in ADBE over the last 15 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Stephen Mandel'sLone Pine Capitalhas the biggest position in Adobe, worth close to $1.2067 billion, accounting for 7.1% of its total 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $770.3 million position; 0.8% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish comprise John Armitage'sEgerton Capital Limited, Philippe Laffont'sCoatue Managementand Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
As industrywide interest jumped, key money managers have been driving this bullishness.Palestra Capital Management, managed by Andrew Immerman and Jeremy Schiffman, created the most outsized position in Adobe Inc. (NASDAQ:ADBE). Palestra Capital Management had $110.2 million invested in the company at the end of the quarter. Keith Meister'sCorvex Capitalalso initiated a $71.9 million position during the quarter. The other funds with new positions in the stock are George Soros'sSoros Fund Management, David Tepper'sAppaloosa Management LP, and Sander Gerber'sHudson Bay Capital Management.
Let's go over hedge fund activity in other stocks similar to Adobe. We will take a look at Eli Lilly and Company (NYSE:LLY), International Business Machines Corp. (NYSE:IBM), Novo Nordisk A/S (NYSE:NVO), and Medtronic, Inc. (NYSE:MDT). All of these stocks' market caps are closest to ADBE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LLY,44,2163009,-3 IBM,46,2215447,-2 NVO,25,2388157,7 MDT,50,2124479,-5 Average,41.25,2222773,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 41.25 hedge funds with bullish positions and the average amount invested in these stocks was $2223 million. That figure was $8966 million in ADBE's case. Medtronic, Inc. (NYSE:MDT) is the most popular stock in this table. On the other hand Novo Nordisk A/S (NYSE:NVO) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Adobe Inc. (NASDAQ:ADBE) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.4% in Q2 and outperformed the S&P 500 ETF (SPY) by more than 2 percentage points. Hedge funds were also right about betting on ADBE as the stock returned 10.6% during the same period and outperformed the market by an even larger margin. Adobe shares also gained more than 30% this year. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published atInsider Monkey.
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What Should We Expect From Indraprastha Gas Limited's (NSE:IGL) Earnings In The Years Ahead?
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Indraprastha Gas Limited's (NSE:IGL) released its most recent earnings update in May 2019, which suggested that the business benefited from a strong tailwind, leading to a double-digit earnings growth of 17%. Below, I've presented key growth figures on how market analysts view Indraprastha Gas's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Indraprastha Gas
Market analysts' prospects for the coming year seems optimistic, with earnings increasing by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 25% compared to today’s earnings, and finally hitting ₹12b by 2022.
While it is helpful to understand the rate of growth each year relative to today’s level, it may be more valuable to evaluate the rate at which the earnings are growing every year, on average. The benefit of this technique is that we can get a bigger picture of the direction of Indraprastha Gas's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11%. This means that, we can anticipate Indraprastha Gas will grow its earnings by 11% every year for the next few years.
For Indraprastha Gas, there are three important aspects you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Valuation: What is IGL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether IGL is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IGL? Exploreour interactive list of stocks with large growth potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Here's Why We Think JSW Steel (NSE:JSWSTEEL) Is Well Worth Watching
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Peter Lynch said inOne Up On Wall Street, 'Long shots almost never pay off.'
So if you're like me, you might be more interested in profitable, growing companies, likeJSW Steel(NSE:JSWSTEEL). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
See our latest analysis for JSW Steel
Over the last three years, JSW Steel has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. JSW Steel boosted its trailing twelve month EPS from ₹25.85 to ₹31.77, in the last year. I doubt many would complain about that 23% gain.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). I note that JSW Steel's revenuefrom operationswas lower than its revenue in the last twelve months, so that could distort my analysis of its margins. While we note JSW Steel's EBIT margins were flat over the last year, revenue grew by a solid 21% to ₹848b. That's a real positive.
In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.
The trick, as an investor, is to find companies that aregoing toperform well in the future, not just in the past. To that end, right now and today, you can checkour visualization of consensus analyst forecasts for future JSW Steel EPS100% free.
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
It's good to see JSW Steel insiders walking the walk, by spending ₹20m on shares in just twelve months. When you contrast that with the complete lack of sales, it's easy for shareholders to brim with joyful expectancy. Zooming in, we can see that the biggest insider purchase was by Parth Jindal for ₹20m worth of shares, at about ₹400 per share.
The good news, alongside the insider buying, for JSW Steel bulls is that insiders (collectively) have a meaningful investment in the stock. Indeed, they have a glittering mountain of wealth invested in it, currently valued at ₹11b. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!
One important encouraging feature of JSW Steel is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for my watchlist - and arguably a research priority. Of course, just because JSW Steel is growing does not mean it is undervalued. If you're wondering about the valuation, check outthis gauge of its price-to-earnings ratio, as compared to its industry.
The good news is that JSW Steel is not the only growth stock with insider buying. Here'sa a list of them... with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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With EPS Growth And More, JSW Steel (NSE:JSWSTEEL) Is Interesting
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
In contrast to all that, I prefer to spend time on companies likeJSW Steel(NSE:JSWSTEEL), which has not only revenues, but also profits. While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
View our latest analysis for JSW Steel
In the last three years JSW Steel's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. It's good to see that JSW Steel's EPS have grown from ₹25.85 to ₹31.77 over twelve months. I doubt many would complain about that 23% gain.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). I note that JSW Steel's revenuefrom operationswas lower than its revenue in the last twelve months, so that could distort my analysis of its margins. JSW Steel maintained stable EBIT margins over the last year, all while growing revenue 21% to ₹848b. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not checkthis interactive chart depicting future EPS estimates, for JSW Steel?
Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Any way you look at it JSW Steel shareholders can gain quiet confidence from the fact that insiders shelled out ₹20m to buy stock, over the last year. And when you consider that there was no insider selling, you can understand why shareholders might believe that lady luck will grace this business. Zooming in, we can see that the biggest insider purchase was by Parth Jindal for ₹20m worth of shares, at about ₹400 per share.
Along with the insider buying, another encouraging sign for JSW Steel is that insiders, as a group, have a considerable shareholding. Notably, they have an enormous stake in the company, worth ₹11b. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!
As I already mentioned, JSW Steel is a growing business, which is what I like to see. On top of that, we've seen insiders buying shareseven though they already own plenty. To me, that all makes it well worth a spot on your watchlist, as well as continuing research. Now, you could try to make up your mind on JSW Steel by focusing on just these factors,oryou couldalsoconsider how its price-to-earnings ratio compares to other companies in its industry.
The good news is that JSW Steel is not the only growth stock with insider buying. Here'sa a list of them... with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Is Jounce Therapeutics, Inc. (JNCE) A Good Stock To Buy?
After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Jounce Therapeutics, Inc. (NASDAQ:JNCE).
Jounce Therapeutics, Inc. (NASDAQ:JNCE)has seen an increase in support from the world's most elite money managers in recent months.JNCEwas in 10 hedge funds' portfolios at the end of the first quarter of 2019. There were 8 hedge funds in our database with JNCE holdings at the end of the previous quarter. Our calculations also showed that JNCE isn't among the30 most popular stocks among hedge funds.
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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_745225" align="aligncenter" width="473"]
Noam Gottesman, GLG Partners[/caption]
Let's analyze the fresh hedge fund action regarding Jounce Therapeutics, Inc. (NASDAQ:JNCE).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in JNCE over the last 15 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds,AQR Capital Managementheld the most valuable stake in Jounce Therapeutics, Inc. (NASDAQ:JNCE), which was worth $2.4 million at the end of the first quarter. On the second spot was Redmile Group which amassed $1.6 million worth of shares. Moreover, Two Sigma Advisors, D E Shaw, and Citadel Investment Group were also bullish on Jounce Therapeutics, Inc. (NASDAQ:JNCE), allocating a large percentage of their portfolios to this stock.
Now, specific money managers have jumped into Jounce Therapeutics, Inc. (NASDAQ:JNCE) headfirst.PDT Partners, managed by Peter Muller, assembled the most valuable position in Jounce Therapeutics, Inc. (NASDAQ:JNCE). PDT Partners had $0.3 million invested in the company at the end of the quarter. Noam Gottesman'sGLG Partnersalso initiated a $0.1 million position during the quarter. The other funds with new positions in the stock are Thomas Bailard'sBailard Incand Peter Algert and Kevin Coldiron'sAlgert Coldiron Investors.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Jounce Therapeutics, Inc. (NASDAQ:JNCE) but similarly valued. These stocks are Ardmore Shipping Corp (NYSE:ASC), Lifevantage Corporation (NASDAQ:LFVN), Foamix Pharmaceuticals Ltd (NASDAQ:FOMX), and Unity Bancorp, Inc. (NASDAQ:UNTY). This group of stocks' market valuations are similar to JNCE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ASC,9,20991,-1 LFVN,11,23500,0 FOMX,15,66772,0 UNTY,4,29798,0 Average,9.75,35265,-0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $7 million in JNCE's case. Foamix Pharmaceuticals Ltd (NASDAQ:FOMX) is the most popular stock in this table. On the other hand Unity Bancorp, Inc. (NASDAQ:UNTY) is the least popular one with only 4 bullish hedge fund positions. Jounce Therapeutics, Inc. (NASDAQ:JNCE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately JNCE wasn't nearly as popular as these 20 stocks and hedge funds that were betting on JNCE were disappointed as the stock returned -21.6% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Net 1 UEPS Technologies Inc (UEPS) A Good Stock To Buy?
The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and famous investors' filings. In this article, we analyze how these elite funds and prominent investors traded Net 1 UEPS Technologies Inc (NASDAQ:UEPS) based on those filings.
IsNet 1 UEPS Technologies Inc (NASDAQ:UEPS)the right investment to pursue these days? Money managers are taking a pessimistic view. The number of long hedge fund positions retreated by 3 lately. Our calculations also showed that UEPS isn't among the30 most popular stocks among hedge funds.
According to most market participants, hedge funds are perceived as worthless, outdated financial tools of years past. While there are more than 8000 funds in operation today, We choose to focus on the top tier of this club, around 750 funds. These investment experts handle most of the smart money's total capital, and by paying attention to their first-class picks, Insider Monkey has brought to light many investment strategies that have historically defeated Mr. Market. Insider Monkey's flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let's analyze the new hedge fund action regarding Net 1 UEPS Technologies Inc (NASDAQ:UEPS).
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in UEPS a year ago. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey,International Value Advisers, managed by Charles de Vaulx, holds the number one position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS). International Value Advisers has a $29.1 million position in the stock, comprising 1.1% of its 13F portfolio. The second largest stake is held byPrescott Group Capital Management, led by Phil Frohlich, holding a $16.3 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism consist of David Rosen'sRubric Capital Management, D. E. Shaw'sD E Shawand Jim Simons'sRenaissance Technologies.
Because Net 1 UEPS Technologies Inc (NASDAQ:UEPS) has faced a decline in interest from hedge fund managers, it's easy to see that there was a specific group of money managers who sold off their positions entirely last quarter. At the top of the heap, William B. Gray'sOrbis Investment Managementdumped the biggest investment of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $3.8 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund cut about $0.5 million worth. These moves are important to note, as total hedge fund interest fell by 3 funds last quarter.
Let's now review hedge fund activity in other stocks similar to Net 1 UEPS Technologies Inc (NASDAQ:UEPS). We will take a look at PICO Holdings Inc (NASDAQ:PICO), Alico, Inc. (NASDAQ:ALCO), Ion Geophysical Corp (NYSE:IO), and Coastal Financial Corporation (NASDAQ:CCB). This group of stocks' market caps match UEPS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PICO,7,24519,-1 ALCO,6,24100,0 IO,10,27737,3 CCB,2,19164,0 Average,6.25,23880,0.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $68 million in UEPS's case. Ion Geophysical Corp (NYSE:IO) is the most popular stock in this table. On the other hand Coastal Financial Corporation (NASDAQ:CCB) is the least popular one with only 2 bullish hedge fund positions. Net 1 UEPS Technologies Inc (NASDAQ:UEPS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately UEPS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on UEPS were disappointed as the stock returned -4.2% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On TCG BDC, Inc. (CGBD)
A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell's pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of TCG BDC, Inc. (NASDAQ:CGBD) during the quarter.
IsTCG BDC, Inc. (NASDAQ:CGBD)a buy, sell, or hold? Hedge funds are betting on the stock. The number of long hedge fund positions advanced by 2 lately. Our calculations also showed that CGBD isn't among the30 most popular stocks among hedge funds.CGBDwas in 12 hedge funds' portfolios at the end of the first quarter of 2019. There were 10 hedge funds in our database with CGBD positions at the end of the previous quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to check out the new hedge fund action encompassing TCG BDC, Inc. (NASDAQ:CGBD).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from one quarter earlier. On the other hand, there were a total of 4 hedge funds with a bullish position in CGBD 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,Millennium Managementwas the largest shareholder of TCG BDC, Inc. (NASDAQ:CGBD), with a stake worth $6.4 million reported as of the end of March. Trailing Millennium Management was Marshall Wace LLP, which amassed a stake valued at $5.6 million. Arrowstreet Capital, Citadel Investment Group, and McKinley Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, specific money managers have been driving this bullishness.D E Shaw, managed by D. E. Shaw, initiated the most outsized position in TCG BDC, Inc. (NASDAQ:CGBD). D E Shaw had $1 million invested in the company at the end of the quarter. Andrew Feldstein and Stephen Siderow'sBlue Mountain Capitalalso made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new CGBD position is Matthew Hulsizer'sPEAK6 Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to TCG BDC, Inc. (NASDAQ:CGBD). These stocks are Associated Capital Group, Inc. (NYSE:AC), Mesa Laboratories, Inc. (NASDAQ:MLAB), 21Vianet Group Inc (NASDAQ:VNET), and Forrester Research, Inc. (NASDAQ:FORR). All of these stocks' market caps match CGBD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AC,7,70766,3 MLAB,10,53050,1 VNET,18,45451,1 FORR,13,63228,3 Average,12,58124,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $24 million in CGBD's case. 21Vianet Group Inc (NASDAQ:VNET) is the most popular stock in this table. On the other hand Associated Capital Group, Inc. (NYSE:AC) is the least popular one with only 7 bullish hedge fund positions. TCG BDC, Inc. (NASDAQ:CGBD) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on CGBD as the stock returned 6.9% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Qiwi PLC (QIWI)
Hedge fund managers like David Einhorn, Bill Ackman, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Qiwi PLC (NASDAQ:QIWI).
IsQiwi PLC (NASDAQ:QIWI)a splendid investment right now? The smart money is becoming more confident. The number of long hedge fund bets improved by 4 lately. Our calculations also showed that QIWI isn't among the30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's take a gander at the recent hedge fund action regarding Qiwi PLC (NASDAQ:QIWI).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in QIWI a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in Qiwi PLC (NASDAQ:QIWI) was held byMelqart Asset Management, which reported holding $36.5 million worth of stock at the end of March. It was followed by Platinum Asset Management with a $22.5 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and Arrowstreet Capital.
With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd.CSat Investment Advisory, managed by Claes Fornell, assembled the biggest position in Qiwi PLC (NASDAQ:QIWI). CSat Investment Advisory had $1 million invested in the company at the end of the quarter. Ken Griffin'sCitadel Investment Groupalso initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace'sMarshall Wace LLP, Matthew Hulsizer'sPEAK6 Capital Management, and Matthew Tewksbury'sStevens Capital Management.
Let's now review hedge fund activity in other stocks similar to Qiwi PLC (NASDAQ:QIWI). These stocks are Changyou.Com Ltd (NASDAQ:CYOU), MacroGenics Inc (NASDAQ:MGNX), Wesco Aircraft Holdings Inc (NYSE:WAIR), and Gran Tierra Energy Inc. (NYSE:GTE). This group of stocks' market valuations resemble QIWI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CYOU,11,47035,4 MGNX,23,139857,5 WAIR,22,195494,5 GTE,16,269130,0 Average,18,162879,3.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $163 million. That figure was $78 million in QIWI's case. MacroGenics Inc (NASDAQ:MGNX) is the most popular stock in this table. On the other hand Changyou.Com Ltd (NASDAQ:CYOU) is the least popular one with only 11 bullish hedge fund positions. Qiwi PLC (NASDAQ:QIWI) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on QIWI as the stock returned 42.5% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Tutor Perini Corp (TPC) A Good Stock To Buy?
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Tutor Perini Corp (NYSE:TPC).
IsTutor Perini Corp (NYSE:TPC)a healthy stock for your portfolio? The best stock pickers are getting more optimistic. The number of bullish hedge fund bets increased by 5 recently. Our calculations also showed that TPC isn't among the30 most popular stocks among hedge funds.
If you'd ask most investors, hedge funds are viewed as underperforming, outdated investment tools of the past. While there are greater than 8000 funds in operation at present, Our researchers choose to focus on the moguls of this club, approximately 750 funds. These money managers manage bulk of the hedge fund industry's total capital, and by following their unrivaled stock picks, Insider Monkey has deciphered numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a glance at the recent hedge fund action regarding Tutor Perini Corp (NYSE:TPC).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 71% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in TPC a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Grossman and Glen Schneider'sSG Capital Managementhas the most valuable position in Tutor Perini Corp (NYSE:TPC), worth close to $9.3 million, corresponding to 1.7% of its total 13F portfolio. The second most bullish fund manager isCitadel Investment Group, led by Ken Griffin, holding a $3.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions comprise John Overdeck and David Siegel'sTwo Sigma Advisors, Paul Tudor Jones'sTudor Investment Corpand Jim Simons'sRenaissance Technologies.
As industrywide interest jumped, specific money managers were breaking ground themselves.SG Capital Management, managed by Ken Grossman and Glen Schneider, assembled the most valuable position in Tutor Perini Corp (NYSE:TPC). SG Capital Management had $9.3 million invested in the company at the end of the quarter. Howard Marks'sOaktree Capital Managementalso initiated a $5.6 million position during the quarter. The other funds with new positions in the stock are Jim Simons'sRenaissance Technologies, Roger Ibbotson'sZebra Capital Management, and Cliff Asness'sAQR Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Tutor Perini Corp (NYSE:TPC). We will take a look at Enviva Partners, LP (NYSE:EVA), Natus Medical Inc (NASDAQ:BABY), The Providence Service Corporation (NASDAQ:PRSC), and Cerus Corporation (NASDAQ:CERS). This group of stocks' market valuations match TPC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EVA,7,89870,1 BABY,24,110207,9 PRSC,12,181177,-2 CERS,17,108108,2 Average,15,122341,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $122 million. That figure was $18 million in TPC's case. Natus Medical Inc (NASDAQ:BABY) is the most popular stock in this table. On the other hand Enviva Partners, LP (NYSE:EVA) is the least popular one with only 7 bullish hedge fund positions. Tutor Perini Corp (NYSE:TPC) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TPC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TPC investors were disappointed as the stock returned -24.9% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Systemax Inc. (SYX) A Good Stock To Buy?
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 Systemax Inc. (NYSE:SYX) based on that data.
Systemax Inc. (NYSE:SYX)investors should pay attention to an increase in activity from the world's largest hedge funds recently. Our calculations also showed that SYX isn't among the30 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 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.
We're going to take a peek at the fresh hedge fund action regarding Systemax Inc. (NYSE:SYX).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SYX over the last 15 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically,AQR Capital Managementwas the largest shareholder of Systemax Inc. (NYSE:SYX), with a stake worth $7.6 million reported as of the end of March. Trailing AQR Capital Management was Royce & Associates, which amassed a stake valued at $4.3 million. Renaissance Technologies, Citadel Investment Group, and Portolan Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, some big names have jumped into Systemax Inc. (NYSE:SYX) headfirst.Caxton Associates LP, managed by Bruce Kovner, created the most valuable position in Systemax Inc. (NYSE:SYX). Caxton Associates LP had $0.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitalalso made a $0.3 million investment in the stock during the quarter.
Let's check out hedge fund activity in other stocks similar to Systemax Inc. (NYSE:SYX). These stocks are PlayAGS, Inc. (NYSE:AGS), QAD Inc. (NASDAQ:QADA), CBTX, Inc. (NASDAQ:CBTX), and Intrexon Corp (NASDAQ:XON). This group of stocks' market caps are similar to SYX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AGS,22,130434,11 QADA,16,124879,-1 CBTX,8,22427,0 XON,8,11013,-2 Average,13.5,72188,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $23 million in SYX's case. PlayAGS, Inc. (NYSE:AGS) is the most popular stock in this table. On the other hand CBTX, Inc. (NASDAQ:CBTX) is the least popular one with only 8 bullish hedge fund positions. Systemax Inc. (NYSE:SYX) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately SYX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SYX investors were disappointed as the stock returned -4.9% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is ArcBest Corp (ARCB) A Good Stock To Buy?
"The end to the U.S. Government shutdown, reports of progress on China-U.S. trade talks, and the Federal Reserve’s confirmation that it did not plan further interest rate hikes in 2019 allayed investor fears and drove U.S. markets substantially higher in the first quarter of the year. Global markets followed suit pretty much across the board delivering what some market participants described as a “V-shaped” recovery," This is how Evermore Global Value summarized the first quarter in itsinvestor letter. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards one of the stocks hedge funds invest in.
ArcBest Corp (NASDAQ:ARCB)investors should be aware of an increase in activity from the world's largest hedge funds lately.ARCBwas in 12 hedge funds' portfolios at the end of the first quarter of 2019. There were 10 hedge funds in our database with ARCB positions at the end of the previous quarter. Our calculations also showed that ARCB isn't among the30 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 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.
[caption id="attachment_745225" align="aligncenter" width="473"]
Noam Gottesman, GLG Partners[/caption]
We're going to analyze the latest hedge fund action regarding ArcBest Corp (NASDAQ:ARCB).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the fourth quarter of 2018. By comparison, 19 hedge funds held shares or bullish call options in ARCB a year ago. With hedge funds' capital changing hands, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds,Royce & Associatesheld the most valuable stake in ArcBest Corp (NASDAQ:ARCB), which was worth $22.9 million at the end of the first quarter. On the second spot was D E Shaw which amassed $9.1 million worth of shares. Moreover, GLG Partners, Millennium Management, and Gotham Asset Management were also bullish on ArcBest Corp (NASDAQ:ARCB), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, key money managers have jumped into ArcBest Corp (NASDAQ:ARCB) headfirst.Citadel Investment Group, managed by Ken Griffin, assembled the biggest position in ArcBest Corp (NASDAQ:ARCB). Citadel Investment Group had $1.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitalalso made a $0.6 million investment in the stock during the quarter. The following funds were also among the new ARCB investors: Mike Vranos'sEllington, Ken Griffin'sCitadel Investment Group, and Gavin Saitowitz and Cisco J. del Valle'sSpringbok Capital.
Let's go over hedge fund activity in other stocks similar to ArcBest Corp (NASDAQ:ARCB). These stocks are Armada Hoffler Properties Inc (NYSE:AHH), Consolidated Communications Holdings Inc (NASDAQ:CNSL), Triumph Bancorp Inc (NASDAQ:TBK), and Valhi, Inc. (NYSE:VHI). All of these stocks' market caps are closest to ARCB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AHH,11,59825,2 CNSL,11,13357,-3 TBK,5,56315,-1 VHI,6,5844,-3 Average,8.25,33835,-1.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $60 million in ARCB's case. Armada Hoffler Properties Inc (NYSE:AHH) is the most popular stock in this table. On the other hand Triumph Bancorp Inc (NASDAQ:TBK) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks ArcBest Corp (NASDAQ:ARCB) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ARCB wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ARCB were disappointed as the stock returned -14.2% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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With 10% Earnings Growth, Did TAKE Solutions Limited (NSE:TAKE) Outperform The Industry?
Want to participate in ashort research study? Help shape the future of investing tools and you could win a $250 gift card!
For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on TAKE Solutions Limited (NSE:TAKE) useful as an attempt to give more color around how TAKE Solutions is currently performing.
Check out our latest analysis for TAKE Solutions
TAKE's trailing twelve-month earnings (from 31 March 2019) of ₹1.8b has jumped 10% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 23%, indicating the rate at which TAKE is growing has slowed down. Why could this be happening? Well, let's look at what's going on with margins and if the whole industry is feeling the heat.
In terms of returns from investment, TAKE Solutions has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 8.7% exceeds the IN Healthcare Services industry of 6.9%, indicating TAKE Solutions has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for TAKE Solutions’s debt level, has declined over the past 3 years from 18% to 14%.
While past data is useful, it doesn’t tell the whole story. While TAKE Solutions has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research TAKE Solutions to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TAKE’s future growth? Take a look at ourfree research report of analyst consensusfor TAKE’s outlook.
2. Financial Health: Are TAKE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Is Century Aluminum Co (CENX) A Good Stock To Buy?
Is Century Aluminum Co (NASDAQ:CENX) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
IsCentury Aluminum Co (NASDAQ:CENX)going to take off soon? The best stock pickers are buying. The number of bullish hedge fund bets went up by 1 lately. Our calculations also showed that CENX isn't among the30 most popular stocks among hedge funds.
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 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.
Let's check out the recent hedge fund action encompassing Century Aluminum Co (NASDAQ:CENX).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CENX over the last 15 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey,Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Century Aluminum Co (NASDAQ:CENX). Fisher Asset Management has a $10.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot isCitadel Investment Group, managed by Ken Griffin, which holds a $9.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish contain Chuck Royce'sRoyce & Associates, Louis Bacon'sMoore Global Investmentsand Ron Gutfleish'sElm Ridge Capital.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Century Aluminum Co (NASDAQ:CENX) headfirst.Moore Global Investments, managed by Louis Bacon, assembled the most valuable position in Century Aluminum Co (NASDAQ:CENX). Moore Global Investments had $3.1 million invested in the company at the end of the quarter. Jim Simons'sRenaissance Technologiesalso made a $1.3 million investment in the stock during the quarter. The other funds with new positions in the stock are David Harding'sWinton Capital Management, Sara Nainzadeh'sCentenus Global Management, and D. E. Shaw'sD E Shaw.
Let's check out hedge fund activity in other stocks similar to Century Aluminum Co (NASDAQ:CENX). We will take a look at Huami Corporation (NYSE:HMI), Argan, Inc. (NYSE:AGX), SP Plus Corp (NASDAQ:SP), and Duluth Holdings Inc. (NASDAQ:DLTH). This group of stocks' market values are similar to CENX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HMI,4,7550,0 AGX,12,123440,-1 SP,14,102342,2 DLTH,12,10556,4 Average,10.5,60972,1.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $37 million in CENX's case. SP Plus Corp (NASDAQ:SP) is the most popular stock in this table. On the other hand Huami Corporation (NYSE:HMI) is the least popular one with only 4 bullish hedge fund positions. Century Aluminum Co (NASDAQ:CENX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CENX wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CENX were disappointed as the stock returned -26.1% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here is What Hedge Funds Think About Argan, Inc. (AGX)
"The end to the U.S. Government shutdown, reports of progress on China-U.S. trade talks, and the Federal Reserve’s confirmation that it did not plan further interest rate hikes in 2019 allayed investor fears and drove U.S. markets substantially higher in the first quarter of the year. Global markets followed suit pretty much across the board delivering what some market participants described as a “V-shaped” recovery," This is how Evermore Global Value summarized the first quarter in itsinvestor letter. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards one of the stocks hedge funds invest in.
Argan, Inc. (NYSE:AGX)was in 12 hedge funds' portfolios at the end of the first quarter of 2019. AGX shareholders have witnessed a decrease in support from the world's most elite money managers recently. There were 13 hedge funds in our database with AGX holdings at the end of the previous quarter. Our calculations also showed that AGX isn't among the30 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 glance at the key hedge fund action regarding Argan, Inc. (NYSE:AGX).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the fourth quarter of 2018. By comparison, 17 hedge funds held shares or bullish call options in AGX a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds,Renaissance Technologiesheld the most valuable stake in Argan, Inc. (NYSE:AGX), which was worth $41.5 million at the end of the first quarter. On the second spot was Royce & Associates which amassed $32.1 million worth of shares. Moreover, Hawk Ridge Management, Driehaus Capital, and Fairfax Financial Holdings were also bullish on Argan, Inc. (NYSE:AGX), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Argan, Inc. (NYSE:AGX) has witnessed falling interest from the aggregate hedge fund industry, we can see that there was a specific group of money managers that decided to sell off their full holdings heading into Q3. Interestingly, Phil Frohlich'sPrescott Group Capital Managementdropped the biggest investment of the 700 funds watched by Insider Monkey, comprising close to $1.4 million in stock. Joel Greenblatt's fund,Gotham Asset Management, also cut its stock, about $0.7 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q3.
Let's check out hedge fund activity in other stocks similar to Argan, Inc. (NYSE:AGX). We will take a look at SP Plus Corp (NASDAQ:SP), Duluth Holdings Inc. (NASDAQ:DLTH), Cara Therapeutics Inc (NASDAQ:CARA), and Seacor Holdings, Inc. (NYSE:CKH). This group of stocks' market caps are similar to AGX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SP,14,102342,2 DLTH,12,10556,4 CARA,8,16562,-1 CKH,11,122642,-5 Average,11.25,63026,0 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $123 million in AGX's case. SP Plus Corp (NASDAQ:SP) is the most popular stock in this table. On the other hand Cara Therapeutics Inc (NASDAQ:CARA) is the least popular one with only 8 bullish hedge fund positions. Argan, Inc. (NYSE:AGX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately AGX wasn't nearly as popular as these 20 stocks and hedge funds that were betting on AGX were disappointed as the stock returned -17.2% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Duluth Holdings Inc. (DLTH)
The elite funds run by legendary investors such as David Tepper and Dan Loeb make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don't follow. Because of their pay structures, they have strong incentives to do the research necessary to beat the market. That's why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Duluth Holdings Inc. (NASDAQ:DLTH) from the perspective of those elite funds.
Duluth Holdings Inc. (NASDAQ:DLTH)was in 12 hedge funds' portfolios at the end of March. DLTH shareholders have witnessed an increase in enthusiasm from smart money recently. There were 8 hedge funds in our database with DLTH holdings at the end of the previous quarter. Our calculations also showed that dlth isn't among the30 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.
[caption id="attachment_30621" align="aligncenter" width="487"]
Cliff Asness of AQR Capital Management[/caption]
We're going to take a peek at the latest hedge fund action surrounding Duluth Holdings Inc. (NASDAQ:DLTH).
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DLTH over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Duluth Holdings Inc. (NASDAQ:DLTH) was held bySkylands Capital, which reported holding $2.3 million worth of stock at the end of March. It was followed by Venator Capital Management with a $2.2 million position. Other investors bullish on the company included D E Shaw, Citadel Investment Group, and AQR Capital Management.
As one would reasonably expect, specific money managers have been driving this bullishness.Venator Capital Management, managed by Brandon Osten, assembled the most outsized position in Duluth Holdings Inc. (NASDAQ:DLTH). Venator Capital Management had $2.2 million invested in the company at the end of the quarter. Cliff Asness'sAQR Capital Managementalso made a $0.7 million investment in the stock during the quarter. The other funds with brand new DLTH positions are Mike Vranos'sEllington, Jim Simons'sRenaissance Technologies, and Paul Marshall and Ian Wace'sMarshall Wace LLP.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Duluth Holdings Inc. (NASDAQ:DLTH) but similarly valued. We will take a look at Cara Therapeutics, Inc. (NASDAQ:CARA), Seacor Holdings, Inc. (NYSE:CKH), Ruth's Hospitality Group, Inc. (NASDAQ:RUTH), and Meta Financial Group Inc. (NASDAQ:CASH). This group of stocks' market caps match DLTH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CARA,8,16562,-1 CKH,11,122642,-5 RUTH,15,64794,-2 CASH,12,82203,-1 Average,11.5,71550,-2.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $11 million in DLTH's case. Ruth's Hospitality Group, Inc. (NASDAQ:RUTH) is the most popular stock in this table. On the other hand Cara Therapeutics, Inc. (NASDAQ:CARA) is the least popular one with only 8 bullish hedge fund positions. Duluth Holdings Inc. (NASDAQ:DLTH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately DLTH wasn't nearly as popular as these 20 stocks and hedge funds that were betting on DLTH were disappointed as the stock returned -41.4% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been More Bullish On Lakeland Bancorp, Inc. (LBAI)
Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The last 8 months is one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by nearly 9 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Lakeland Bancorp, Inc. (NASDAQ:LBAI).
Hedge fund interest inLakeland Bancorp, Inc. (NASDAQ:LBAI)shares was flat at the end of last quarter. This is usually a negative indicator. 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 TrustCo Bank Corp NY (NASDAQ:TRST), Ameresco Inc (NYSE:AMRC), and Oritani Financial Corp. (NASDAQ:ORIT) to gather more data points.
If you'd ask most market participants, hedge funds are perceived as slow, old investment vehicles of the past. While there are over 8000 funds trading today, Our researchers choose to focus on the top tier of this group, approximately 750 funds. Most estimates calculate that this group of people orchestrate the lion's share of all hedge funds' total asset base, and by watching their top picks, Insider Monkey has discovered several investment strategies that have historically outstripped Mr. Market. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to view the fresh hedge fund action regarding Lakeland Bancorp, Inc. (NASDAQ:LBAI).
Heading into the second quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LBAI over the last 15 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds,Cardinal Capitalheld the most valuable stake in Lakeland Bancorp, Inc. (NASDAQ:LBAI), which was worth $34.7 million at the end of the first quarter. On the second spot was Renaissance Technologies which amassed $12.4 million worth of shares. Moreover, Basswood Capital, Millennium Management, and Marshall Wace LLP were also bullish on Lakeland Bancorp, Inc. (NASDAQ:LBAI), allocating a large percentage of their portfolios to this stock.
Seeing as Lakeland Bancorp, Inc. (NASDAQ:LBAI) has faced a decline in interest from the smart money, it's safe to say that there were a few funds that decided to sell off their full holdings in the third quarter. At the top of the heap, Anton Schutz'sMendon Capital Advisorssold off the largest stake of all the hedgies monitored by Insider Monkey, worth about $4 million in stock. Peter Algert and Kevin Coldiron's fund,Algert Coldiron Investors, also said goodbye to its stock, about $0.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks similar to Lakeland Bancorp, Inc. (NASDAQ:LBAI). We will take a look at TrustCo Bank Corp NY (NASDAQ:TRST), Ameresco Inc (NYSE:AMRC), Oritani Financial Corp. (NASDAQ:ORIT), and Meridian Bioscience, Inc. (NASDAQ:VIVO). This group of stocks' market values match LBAI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRST,10,46536,1 AMRC,10,30678,3 ORIT,7,36842,-1 VIVO,16,83869,-2 Average,10.75,49481,0.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $58 million in LBAI's case. Meridian Bioscience, Inc. (NASDAQ:VIVO) is the most popular stock in this table. On the other hand Oritani Financial Corp. (NASDAQ:ORIT) is the least popular one with only 7 bullish hedge fund positions. Lakeland Bancorp, Inc. (NASDAQ:LBAI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on LBAI, though not to the same extent, as the stock returned 5.1% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Great Southern Bancorp, Inc. (GSBC)
Many investors, including Paul Tudor Jones or Stan Druckenmiller, have beensayingbefore the Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the first quarter, most investors recovered all of their Q4 losses as sentiment shifted and optimism dominated the US China trade negotiations. Nevertheless, many of the stocks that delivered strong returns in the first quarter still sport strong fundamentals and their gains were more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Great Southern Bancorp, Inc. (NASDAQ:GSBC) changed recently.
Great Southern Bancorp, Inc. (NASDAQ:GSBC)has experienced an increase in hedge fund sentiment of late. Our calculations also showed that GSBC isn't among the30 most popular stocks among hedge funds.
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 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.
[caption id="attachment_745225" align="aligncenter" width="473"]
Noam Gottesman, GLG Partners[/caption]
Let's take a look at the recent hedge fund action encompassing Great Southern Bancorp, Inc. (NASDAQ:GSBC).
At Q1's end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in GSBC over the last 15 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Renaissance Technologiesheld the most valuable stake in Great Southern Bancorp, Inc. (NASDAQ:GSBC), which was worth $14.4 million at the end of the first quarter. On the second spot was AQR Capital Management which amassed $4.9 million worth of shares. Moreover, Millennium Management, GLG Partners, and Two Sigma Advisors were also bullish on Great Southern Bancorp, Inc. (NASDAQ:GSBC), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers have been driving this bullishness.Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Great Southern Bancorp, Inc. (NASDAQ:GSBC). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace'sMarshall Wace LLPalso initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell'sArrowstreet Capitaland Peter Muller'sPDT Partners.
Let's now take a look at hedge fund activity in other stocks similar to Great Southern Bancorp, Inc. (NASDAQ:GSBC). These stocks are Eldorado Gold Corp (NYSE:EGO), Comstock Resources Inc (NYSE:CRK), German American Bancorp., Inc. (NASDAQ:GABC), and M/I Homes Inc (NYSE:MHO). This group of stocks' market caps are closest to GSBC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EGO,11,24110,3 CRK,8,7375,0 GABC,6,14020,2 MHO,15,48134,3 Average,10,23410,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $24 million in GSBC's case. M/I Homes Inc (NYSE:MHO) is the most popular stock in this table. On the other hand German American Bancorp., Inc. (NASDAQ:GABC) is the least popular one with only 6 bullish hedge fund positions. Great Southern Bancorp, Inc. (NASDAQ:GSBC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on GSBC as the stock returned 14.4% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published atInsider Monkey.
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The RPP Infra Projects (NSE:RPPINFRA) Share Price Is Down 49% So Some Shareholders Are Getting Worried
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Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized byRPP Infra Projects Limited(NSE:RPPINFRA) shareholders over the last year, as the share price declined 49%. That's well bellow the market return of 3.0%. We note that it has not been easy for shareholders over three years, either; the share price is down 36% in that time. Unfortunately the share price momentum is still quite negative, with prices down 20% in thirty days.
See our latest analysis for RPP Infra Projects
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Even though the RPP Infra Projects share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past. The divergence between the EPS and the share price is quite notable, during the year. So it's well worth checking out some other metrics, too.
With a low yield of 0.5% we doubt that the dividend influences the share price much. RPP Infra Projects's revenue is actually up 16% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Balance sheet strength is crucual. It might be well worthwhile taking a look at ourfreereport on how its financial position has changed over time.
We've already covered RPP Infra Projects's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that RPP Infra Projects's TSR, which was a 49%dropover the last year, was not as bad as the share price return.
RPP Infra Projects shareholders are down 49% for the year (even including dividends), but the market itself is up 3.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 7.0%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Is RPP Infra Projects cheap compared to other companies? These3 valuation measuresmight help you decide.
But note:RPP Infra Projects may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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How Goldman Sachs and Other Hedge Fund Darlings Performed in Q2
Insider Monkey tracks hedge funds, billionaires, and prominent value investors for a very simple reason: their consensus picks generally outperform the market. We aren’t the only research shop broadcasting this fact using a bullhorn. Here is what strategist Ben Snider said in Goldman Sachs’ periodic hedge fund report:
“Despite the strong track record of popular hedge fund stocks, investors often view high ownership as a negative trait when evaluating stock prospects. Clients often ask us to include hedge fund ownership data in stock screens, expressing a preference for buying ‘under-owned’ stocks.”
“In fact, during the past decade hedge fund popularity has been a more useful criterion for selecting stocks than valuations…. The signals from hedge fund popularity and valuation have been particularly useful in combination, especially for investors with slightly longer investment horizons. During the past decade, popular stocks have generally outperformed unpopular stocks across both 3- and 12-month investment horizons” Snider concluded.
It may sound like I am tooting my own horn, but Insider Monkey’s quarterly newsletter is actually superior to Goldman’s report. That’s because we separated the hedge fund favorites into long and short buckets. Our long bucket of hedge fund favorites returned 34.1% in the first half of 2019, whereas our short bucket of hedge fund favorites gained 21.4% during the same period. Hedge funds’ favorite top 20 stocks, on the other hand, returned 24% so far in 2019. You could have beaten the S&P 500 Index funds by 5.7 percentage points by investing inhedge funds’ top 20 picksin 2019, whereas you could have outperformed the index funds by 15.8 percentage points if you invested in our top hedge fund picks. You cantry out our newsletterfree of charge for 14 days to see hedge funds’ latest best stock picks.
The #23 most popular stock among the 743 hedge funds tracked by Insider Monkey wasGoldman Sachs Group, Inc. (NYSE:GS).Goldman Sachs was the third most popular stock among hedge funds at the end of December (see the30 most popular stocks among hedge funds).
We have to warn you against indiscriminately imitating hedge funds' all stock picks. Hedge funds' top 20 stock picks outperformed the S&P 500 Index funds by 5.7 percentage points this year, but hedge funds' top 500 stock picks had the same return as the S&P 500 Index this quarter. Investing in a hedge fund's 35th best idea doesn't give you the same return as investing in a hedge fund's best idea.
[caption id="attachment_315178" align="aligncenter" width="450"]
Warren Buffett[/caption]
Let's review the key hedge fund action encompassing Goldman Sachs Group, Inc. (NYSE:GS).
Heading into the second quarter of 2019, a total of 76 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in GS over the last 15 quarters. With the smart money's capital changing hands, there exists a few key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Among these funds,Berkshire Hathawayheld the most valuable stake in Goldman Sachs Group, Inc. (NYSE:GS), which was worth $3523.7 million at the end of the first quarter. On the second spot was Eagle Capital Management which amassed $1192.7 million worth of shares. Moreover, Greenhaven Associates, Citadel Investment Group, and Pzena Investment Management were also bullish on Goldman Sachs Group, Inc. (NYSE:GS), allocating a large percentage of their portfolios to this stock.
Consequently, some big names have jumped into Goldman Sachs Group, Inc. (NYSE:GS) headfirst.Laurion Capital Management, managed by Benjamin A. Smith, created the most valuable call position in Goldman Sachs Group, Inc. (NYSE:GS). Laurion Capital Management had $64.6 million invested in the company at the end of the quarter. Steven Tananbaum'sGoldenTree Asset Managementalso made a $41.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Daniel Lascano'sLomas Capital Management, and Thomas G. Maheras'sTegean Capital Management.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Goldman Sachs Group, Inc. (NYSE:GS) but similarly valued. We will take a look at CVS Caremark Corporation (NYSE:CVS), Automatic Data Processing (NASDAQ:ADP), QUALCOMM, Incorporated (NASDAQ:QCOM), and BlackRock, Inc. (NYSE:BLK). All of these stocks' market caps match GS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CVS,61,908077,-16 ADP,39,2852967,-3 QCOM,45,1905850,-6 BLK,45,753724,9 Average,47.5,1605155,-4 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 47.5 hedge funds with bullish positions and the average amount invested in these stocks was $1605 million. That figure was $7453 million in GS's case. CVS Caremark Corporation (NYSE:CVS) is the most popular stock in this table. On the other hand Automatic Data Processing (NASDAQ:ADP) is the least popular one with only 39 bullish hedge fund positions. Compared to these stocks Goldman Sachs Group, Inc. (NYSE:GS) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.4% in Q2 and outperformed the S&P 500 ETF (SPY) by more than 2 percentage points. Hedge funds were also right about betting on GS as the stock returned 6.6% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published atInsider Monkey.
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China warns of long road ahead for deal with U.S. after ice-breaking talks
By Ben Blanchard and Michael Martina
BEIJING/OSAKA (Reuters) - China and the United States will face a long road before they can reach a deal to end their bitter trade war, with more fights ahead likely, Chinese state media said after the two countries' presidents held ice-breaking talks in Japan.
The world's two largest economies are in the midst of a bitter trade war, which has seen them level increasingly severe tariffs on each other's imports.
In a sign of significant progress in relations on Saturday, Chinese President Xi Jinping and U.S. President Donald Trump, on the sidelines of the G20 summit in Osaka, agreed to a ceasefire and a return to talks.
However, the official China Daily, an English-language daily often used by Beijing to put its message out to the rest of the world, warned while there was now a greater likelihood of reaching an agreement, there's no guarantee there would be one.
"Even though Washington agreed to postpone levying additional tariffs on Chinese goods to make way for negotiations, and Trump even hinted at putting off decisions on Huawei until the end of negotiations, things are still very much up in the air," it said in an editorial late Saturday.
"Agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level."
Trump also offered an olive branch to Xi on Huawei Technologies Co, the world's biggest telecom network equipment maker. The Trump administration has said the Chinese firm poses a national security risk given its close ties to China's government, and has lobbied U.S. allies to keep Huawei out of next-generation 5G telecommunications infrastructure.
The Chinese government's top diplomat, State Councillor Wang Yi, in a lengthy statement about G20 released by the Foreign Ministry following the delegation's return to Beijing, said the Xi-Trump meeting had sent a "positive signal" to the world.
Though problems between the two countries remain, China is confident as long as they both follow the consensus reached by their leaders they can resolve their problems on the basis of mutual respect, Wang said in the statement released late Saturday.
Trump's comments on Huawei, made at a more than hour-long news conference in Osaka following his sit-down with Xi, generated only a cautious welcome from China. The word "Huawei" was not mentioned at all in the top diplomat's appraisal of G20.
Wang Xiaolong, the Foreign Ministry's special envoy of G20 affairs and head of the ministry's Department of International Economic Affairs, said if the United States does what it says on Huawei then China would of course welcome it.
"To put restrictions in areas that go beyond technology and economic factors will definitely lead to a lose-lose situation. So if the U.S. side can do what it says then we will certainly welcome that," Wang told reporters.
The pause in tensions is likely to be welcomed by the business community, and markets, which have swooned on both sides of the Pacific due to the trade war.
Jacob Parker, vice-president of China operations at the U.S.-China Business Council, said returning to talks was good news for the business community and added much needed certainty to "a slowly deteriorating relationship".
"Now comes the hard work of finding consensus on the most difficult issues in the relationship, but with a commitment from the top we're hopeful this will put the two sides on a sustained path to resolution."
China's position as the trade war has progressed has become increasingly strident, saying it would not be bullied, would not give in to pressure, and that it would "fight to the end".
Taoran Notes, an influential WeChat account run by China's Economic Daily, said the United States was now aware that China was not going to give in, and that tariffs on Chinese goods were increasingly unpopular back home.
"We've said it before - communication and friction between China and the United States is a long-term, difficult and complex thing. Fighting then talking, fighting then talking, is the normal state of affairs," it said.
(Reporting by Ben Blanchard and Michael Martina; Editing by Sam Holmes)
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Should You Be Concerned About China Water Affairs Group Limited's (HKG:855) Historical Volatility?
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If you're interested in China Water Affairs Group Limited (HKG:855), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first category is company specific volatility. This can be dealt with by limiting your exposure to any particular stock. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.
Some stocks are more sensitive to general market forces than others. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said 'volatility is far from synonymous with risk' in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.
View our latest analysis for China Water Affairs Group
Given that it has a beta of 0.85, we can surmise that the China Water Affairs Group share price has not been strongly impacted by broader market volatility (over the last 5 years). This means that -- if history is a guide -- buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see China Water Affairs Group's revenue and earnings in the image below.
With a market capitalisation of HK$12b, China Water Affairs Group is a small cap stock. However, it is big enough to catch the attention of professional investors. Small companies can have a low beta value when company specific factors outweigh the influence of overall market volatility. That might be happening here.
Since China Water Affairs Group is not heavily influenced by market moves, its share price is probably far more dependend on company specific developments. It could pay to take a closer look at metrics such as revenue growth, earnings growth, and debt. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as China Water Affairs Group’s financial health and performance track record. I urge you to continue your research by taking a look at the following:
1. Future Outlook: What are well-informed industry analysts predicting for 855’s future growth? Take a look at ourfree research report of analyst consensusfor 855’s outlook.
2. Past Track Record: Has 855 been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look atthe free visual representations of 855's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how 855 measures up against other companies on valuation. You could start with thisfree list of prospective options.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Is Shentong Robot Education Group Company Limited's (HKG:8206) P/E Ratio Really That Good?
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This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). We'll apply a basic P/E ratio analysis to Shentong Robot Education Group Company Limited's (HKG:8206), to help you decide if the stock is worth further research.Shentong Robot Education Group has a P/E ratio of 12.08, based on the last twelve months. That corresponds to an earnings yield of approximately 8.3%.
Check out our latest analysis for Shentong Robot Education Group
Theformula for P/Eis:
Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Or for Shentong Robot Education Group:
P/E of 12.08 = HK$0.38 ÷ HK$0.031 (Based on the trailing twelve months to March 2019.)
A higher P/E ratio implies that investors paya higher pricefor the earning power of the business. That is not a good or a bad thingper se, but a high P/E does imply buyers are optimistic about the future.
P/E ratios primarily reflect market expectations around earnings growth rates. That's because companies that grow earnings per share quickly will rapidly increase the 'E' in the equation. That means even if the current P/E is high, it will reduce over time if the share price stays flat. And as that P/E ratio drops, the company will look cheap, unless its share price increases.
Shentong Robot Education Group's 106% EPS improvement over the last year was like bamboo growth after rain; rapid and impressive.
The P/E ratio essentially measures market expectations of a company. We can see in the image below that the average P/E (15.8) for companies in the consumer services industry is higher than Shentong Robot Education Group's P/E.
Shentong Robot Education Group's P/E tells us that market participants think it will not fare as well as its peers in the same industry. While current expectations are low, the stock could be undervalued if the situation is better than the market assumes. If you consider the stock interesting, further research is recommended. For example, I often monitordirector buying and selling.
It's important to note that the P/E ratio considers the market capitalization, not the enterprise value. So it won't reflect the advantage of cash, or disadvantage of debt. Theoretically, a business can improve its earnings (and produce a lower P/E in the future) by investing in growth. That means taking on debt (or spending its cash).
Spending on growth might be good or bad a few years later, but the point is that the P/E ratio does not account for the option (or lack thereof).
With net cash of HK$114m, Shentong Robot Education Group has a very strong balance sheet, which may be important for its business. Having said that, at 16% of its market capitalization the cash hoard would contribute towards a higher P/E ratio.
Shentong Robot Education Group trades on a P/E ratio of 12.1, which is above the HK market average of 10.9. The excess cash it carries is the gravy on top its fast EPS growth. So based on this analysis we'd expect Shentong Robot Education Group to have a high P/E ratio.
Investors should be looking to buy stocks that the market is wrong about. People often underestimate remarkable growth -- so investors can make money when fast growth is not fully appreciated. We don't have analyst forecasts, but you might want to assessthis data-rich visualizationof earnings, revenue and cash flow.
But note:Shentong Robot Education Group may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with strong recent earnings growth (and a P/E ratio below 20).
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Those Who Purchased Shentong Robot Education Group (HKG:8206) Shares Five Years Ago Have A 26% Loss To Show For It
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Ideally, your overall portfolio should beat the market average. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment inShentong Robot Education Group Company Limited(HKG:8206), since the last five years saw the share price fall 26%. The silver lining is that the stock is up 1.4% in about a week.
Check out our latest analysis for Shentong Robot Education Group
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During five years of share price growth, Shentong Robot Education Group moved from a loss to profitability. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics might give us a better handle on how its value is changing over time.
Revenue is actually up 38% over the time period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Balance sheet strength is crucual. It might be well worthwhile taking a look at ourfreereport on how its financial position has changed over time.
It's good to see that Shentong Robot Education Group has rewarded shareholders with a total shareholder return of 4.2% in the last twelve months. That certainly beats the loss of about 6.0% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. Most investors take the time to check the data on insider transactions. You canclick here to see if insiders have been buying or selling.
But note:Shentong Robot Education Group may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Should Balaji Amines Limited (NSE:BALAMINES) Be Your Next Stock Pick?
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I've been keeping an eye on Balaji Amines Limited (NSE:BALAMINES) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe BALAMINES has a lot to offer. Basically, it is a notable dividend-paying company that has been able to sustain great financial health over the past. Below, I've touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the fullreport on Balaji Amines here.
BALAMINES's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that BALAMINES has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. BALAMINES's has produced operating cash levels of 0.73x total debt over the past year, which implies that BALAMINES's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
Income investors would also be happy to know that BALAMINES is a great dividend company, with a current yield standing at 0.7%. BALAMINES has also been regularly increasing its dividend payments to shareholders over the past decade.
For Balaji Amines, there are three key aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for BALAMINES’s future growth? Take a look at ourfree research report of analyst consensusfor BALAMINES’s outlook.
2. Historical Performance: What has BALAMINES's returns been like over the past? Go into more detail in the past track record analysis and take a look atthe free visual representations of our analysisfor more clarity.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of BALAMINES? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Security and Intelligence Services (India) Limited (NSE:SIS) Delivered A Better ROE Than Its Industry
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Security and Intelligence Services (India) Limited (NSE:SIS).
Over the last twelve monthsSecurity and Intelligence Services (India) has recorded a ROE of 17%. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.17 in profit.
Check out our latest analysis for Security and Intelligence Services (India)
Theformula for return on equityis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Security and Intelligence Services (India):
17% = ₹2.2b ÷ ₹13b (Based on the trailing twelve months to March 2019.)
Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. It is the capital paid in by shareholders, plus any retained earnings. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the profit over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else equal,investors should like a high ROE. Clearly, then, one can use ROE to compare different companies.
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. Pleasingly, Security and Intelligence Services (India) has a superior ROE than the average (7.1%) company in the Commercial Services industry.
That's what I like to see. In my book, a high ROE almost always warrants a closer look. For example,I often check if insiders have been buying shares.
Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
Although Security and Intelligence Services (India) does use debt, its debt to equity ratio of 0.78 is still low. The combination of modest debt and a very respectable ROE suggests this is a business worth watching. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is one way we can compare the business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have the same ROE, then I would generally prefer the one with less debt.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So you might want to take a peek at thisdata-rich interactive graph of forecasts for the company.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Security and Intelligence Services (India) Limited's (NSE:SIS) 0.4% Dividend Yield Looks Pretty Interesting
Want to participate in a short research study ? Help shape the future of investing tools and you could win a $250 gift card! Could Security and Intelligence Services (India) Limited ( NSE:SIS ) be an attractive dividend share to own for the long haul? Investors are often drawn to strong companies with the idea of reinvesting the dividends. If you are hoping to live on your dividends, it's important to be more stringent with your investments than the average punter. Regular readers know we like to apply the same approach to each dividend stock, and we hope you'll find our analysis useful. Security and Intelligence Services (India) has only been paying a dividend for a year or so, so investors might be curious about its 0.4% yield. Some simple analysis can offer a lot of insights when buying a company for its dividend, and we'll go through this below. Click the interactive chart for our full dividend analysis NSEI:SIS Historical Dividend Yield, June 30th 2019 Payout ratios Dividends are typically paid from company earnings. If a company pays more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. Looking at the data, we can see that 12% of Security and Intelligence Services (India)'s profits were paid out as dividends in the last 12 months. We'd say its dividends are thoroughly covered by earnings. We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. Security and Intelligence Services (India) paid out 9.2% of its free cash flow as dividends last year, which is conservative and suggests the dividend is sustainable. It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously. Story continues We update our data on Security and Intelligence Services (India) every 24 hours, so you can always get our latest analysis of its financial health, here. Dividend Volatility One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. With a payment history of less than 2 years, we think it's a bit too soon to think about living on the income from its dividend. During the past one-year period, the first annual payment was ₹4.00 in 2018, compared to ₹3.50 last year. The dividend has fallen 13% over that period. We struggle to make a case for buying Security and Intelligence Services (India) for its dividend, given that payments have shrunk over the past one years. Dividend Growth Potential Examining whether the dividend is affordable and stable is important. However, it's also important to assess if earnings per share (EPS) are growing. Over the long term, dividends need to grow at or above the rate of inflation, in order to maintain the recipient's purchasing power. It's good to see Security and Intelligence Services (India) has been growing its earnings per share at 24% a year over the past 5 years. The company is only paying out a fraction of its earnings as dividends, and in the past been able to use the retained earnings to grow its profits rapidly - an ideal combination. Conclusion When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. Firstly, we like that Security and Intelligence Services (India) has low and conservative payout ratios. We were also glad to see it growing earnings, although its dividend history is not as long as we'd like. All things considered, Security and Intelligence Services (India) looks like a strong prospect. At the right valuation, it could be something special. Earnings growth generally bodes well for the future value of company dividend payments. See if the 6 Security and Intelligence Services (India) analysts we track are forecasting continued growth with our free report on analyst estimates for the company . We have also put together a list of global stocks with a market capitalisation above $1bn and yielding more 3%. We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Are Investors Undervaluing Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6) By 32%?
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Today we will run through one way of estimating the intrinsic value of Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6) by taking the expected future cash flows and discounting them to today's value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in theSimply Wall St analysis model.
View our latest analysis for Yangzijiang Shipbuilding (Holdings)
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
[{"": "Levered FCF (CN\u00a5, Millions)", "2019": "CN\u00a52.02k", "2020": "CN\u00a52.77k", "2021": "CN\u00a52.99k", "2022": "CN\u00a53.18k", "2023": "CN\u00a53.34k", "2024": "CN\u00a53.48k", "2025": "CN\u00a53.60k", "2026": "CN\u00a53.72k", "2027": "CN\u00a53.83k", "2028": "CN\u00a53.94k"}, {"": "Growth Rate Estimate Source", "2019": "Analyst x2", "2020": "Analyst x4", "2021": "Analyst x3", "2022": "Est @ 6.2%", "2023": "Est @ 5.03%", "2024": "Est @ 4.21%", "2025": "Est @ 3.64%", "2026": "Est @ 3.24%", "2027": "Est @ 2.96%", "2028": "Est @ 2.76%"}, {"": "Present Value (CN\u00a5, Millions) Discounted @ 9.05%", "2019": "CN\u00a51.85k", "2020": "CN\u00a52.33k", "2021": "CN\u00a52.31k", "2022": "CN\u00a52.25k", "2023": "CN\u00a52.16k", "2024": "CN\u00a52.07k", "2025": "CN\u00a51.97k", "2026": "CN\u00a51.86k", "2027": "CN\u00a51.76k", "2028": "CN\u00a51.66k"}]
Present Value of 10-year Cash Flow (PVCF)= CN¥20.20b
"Est" = FCF growth rate estimated by Simply Wall St
After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 10-year government bond rate of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 9%.
Terminal Value (TV)= FCF2029× (1 + g) ÷ (r – g) = CN¥3.9b × (1 + 2.3%) ÷ (9% – 2.3%) = CN¥60b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥CN¥60b ÷ ( 1 + 9%)10= CN¥25.11b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥45.32b. In the final step we divide the equity value by the number of shares outstanding. This results in an intrinsic value estimate in the company’s reported currency of CN¥11.48. However, BS6’s primary listing is in China, and 1 share of BS6 in CNY represents 0.197 ( CNY/ SGD) share of SGX:BS6,so the intrinsic value per share in SGD is SGD2.26.Compared to the current share price of SGD1.53, the company appears quite undervalued at a 32% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Yangzijiang Shipbuilding (Holdings) as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9%, which is based on a levered beta of 1.132. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Although the valuation of a company is important, it shouldn’t be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price to differ from the intrinsic value? For Yangzijiang Shipbuilding (Holdings), I've compiled three fundamental factors you should look at:
1. Financial Health: Does BS6 have a healthy balance sheet? Take a look at ourfree balance sheet analysis with six simple checkson key factors like leverage and risk.
2. Future Earnings: How does BS6's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with ourfree analyst growth expectation chart.
3. Other High Quality Alternatives: Are there other high quality stocks you could be holding instead of BS6? Exploreour interactive list of high quality stocksto get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every SG stock every day, so if you want to find the intrinsic value of any other stock justsearch here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Should You Be Concerned About Yangzijiang Shipbuilding (Holdings) Ltd.'s (SGX:BS6) Historical Volatility?
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If you own shares in Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second sort is caused by the natural volatility of markets, overall. For example, certain macroeconomic events will impact (virtually) all stocks on the market.
Some stocks are more sensitive to general market forces than others. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market. In comparison a stock with a beta of over one tends to be move in a similar direction to the market in the long term, but with greater changes in price.
View our latest analysis for Yangzijiang Shipbuilding (Holdings)
Zooming in on Yangzijiang Shipbuilding (Holdings), we see it has a five year beta of 1.22. This is above 1, so historically its share price has been influenced by the broader volatility of the stock market. If this beta value holds true in the future, Yangzijiang Shipbuilding (Holdings) shares are likely to rise more than the market when the market is going up, but fall faster when the market is going down. Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see Yangzijiang Shipbuilding (Holdings)'s revenue and earnings in the image below.
Yangzijiang Shipbuilding (Holdings) is a fairly large company. It has a market capitalisation of S$6.0b, which means it is probably on the radar of most investors. It takes a lot of money to influence the share price of large companies like this one. That makes it interesting to note that its share price has a history of sensitivity to market volatility. There might be some aspect of the business that means profits are leveraged to the economic cycle.
Since Yangzijiang Shipbuilding (Holdings) has a reasonably high beta, it's worth considering why it is so heavily influenced by broader market sentiment. For example, it might be a high growth stock or have a lot of operating leverage in its business model. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Yangzijiang Shipbuilding (Holdings)’s financial health and performance track record. I urge you to continue your research by taking a look at the following:
1. Future Outlook: What are well-informed industry analysts predicting for BS6’s future growth? Take a look at ourfree research report of analyst consensusfor BS6’s outlook.
2. Past Track Record: Has BS6 been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look atthe free visual representations of BS6's historicalsfor more clarity.
3. Other Interesting Stocks: It's worth checking to see how BS6 measures up against other companies on valuation. You could start with thisfree list of prospective options.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Should You Worry About Solar Industries India Limited's (NSE:SOLARINDS) CEO Salary Level?
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Manish Nuwal is the CEO of Solar Industries India Limited (NSE:SOLARINDS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Solar Industries India
Our data indicates that Solar Industries India Limited is worth ₹115b, and total annual CEO compensation is ₹28m. (This is based on the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹12m. We looked at a group of companies with market capitalizations from ₹69b to ₹221b, and the median CEO total compensation was ₹39m.
That means Manish Nuwal receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Solar Industries India has changed over time.
Solar Industries India Limited has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). Its revenue is up 28% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested inthisfreevisualization of analyst forecasts.
Boasting a total shareholder return of 98% over three years, Solar Industries India Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Manish Nuwal is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! If you think CEO compensation levels are interesting you will probably really likethis free visualization of insider trading at Solar Industries India.
If you want to buy a stock that is better than Solar Industries India, thisfreelist of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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NFL: 49ers' Marquise Goodwin wins 40 Yards of Gold, $1M
San Francisco 49ers wide receiver Marquise Goodwin is officially the fastest player in the NFL after winning the "40 Yards of Gold" sprinting competition on Saturday night. (AP/Mike Roemer) The debate is over. Marquise Goodwin is officially the fastest man in the NFL. The San Francisco 49ers wide receiver won the inaugural 40 Yards of Gold competition in Miami on Saturday night, beating out Carolina Panthers cornerback Donte Jackson by just 0.05 seconds to bring home the $1 million prize. Marquise Goodwin tops Donte Jackson by .05 seconds to win inaugural 40 Yards of Gold title. Absolutely electric. He wins the $1 million prize. pic.twitter.com/FPJWcGOGAO — David Furones (@DavidFurones_) June 30, 2019 Marquise Goodwin with the $1 million check for winning the inaugural 40 Yards of Gold. pic.twitter.com/5R8IGbLHyZ — David Furones (@DavidFurones_) June 30, 2019 The competition put 16 current and former players into a single-elimination field, with eight offensive players and eight defensive players. The winners of each division — Goodwin and Jackson — faced off in the finals. The field was loaded, too. Goodwin, who ran track at Texas and competed in the long jump at the 2012 Olympics in London, flew through the offense side of the bracket, beating Arizona Cardinals receiver Damiere Byrd, Atlanta Falcons receiver Christian Blake and Denver Broncos running back Khalfani Muhammad. Jackson beat cornerbacks Trae Waynes and Jalen Myrick to reach the semifinals, and then beat John Franklin III by just 0.01 seconds to reach the final, according to ESPN . Donte Jackson tops John Franklin III by .01 (!) seconds in a 40 Yards of Gold semifinal. It’s Jackson vs. Marquise Goodwin in a big-name final. pic.twitter.com/yeUBn9GesJ — David Furones (@DavidFurones_) June 30, 2019 Each of the 16 players who competed received an appearance fee for doing so, and won prizes for advancing through each round. They were also insured in case of injury. Story continues So, for now at least, Goodwin will head into the season with one of the most coveted titles in the NFL — and a nice payday to go along with it. And given the success of the inaugural event, it’s likely that Goodwin will have to head down to South Florida again next summer to defend his title, too. More from Yahoo Sports: Why Alex Morgan was key to USWNT despite not scoring Report: Durant’s free agent wish list has four teams Rapinoe steals show as USWNT beats co-favorite France Report: Kawhi wants Magic involved in Lakers meeting
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Network Rail makes indicative offer for some British Steel assets
By Bhargav Acharya
(Reuters) - Britain's Network Rail said on Sunday it has made an indicative offer for some "railway critical" assets of British Steel, the country's second-largest steel producer which went into liquidation last month.
State-owned Network Rail is a British Steel customer, buying about 100,000 tonnes of rails a year from the company, which was put into compulsory liquidation on May 22 after Greybull Capital, which bought it from Tata Steel three years ago, failed to secure extra funding.
The company has been open for bids from potential buyers until an extended deadline of June 30, and the office handling British Steel's liquidation said in May that around 80 companies had been given access to the books.
"We have made an indicative offer for some railway critical assets although our overwhelming preference is that a purchaser for the entire business is found," a spokesperson for Network Rail said in an emailed statement.
The railway infrastructure operator is working with British Steel's liquidator, the spokesperson said, adding that it was 'very clear' that Network Rail's offer would not undermine its preference of British Steel being sold in its entirety.
A closure of British Steel, which produces high-cost long steel products used in construction and rail networks, would jeopardise 25,000 jobs, including 5,000 in Scunthorpe, northern England.
Banking and industry sources told Reuters on Friday that the company has attracted interest from up to nine possible buyers, but far fewer firm bids were expected by an extended June 30 deadline.
Sources previously told Reuters that none of the potential buyers would be willing to take on the whole company, even for a nominal sum, due to the need for capital expenditure to make it profitable after years of underinvestment.
The Daily Telegraph reported that Network Rail submitted a letter of intent on Friday to buy British Steel's rail service centre business, responsible for the welding, finishing and storing of rails for UK's train network.
British Steel did not respond to a request for comment.
(Reporting by Bhargav Acharya and additional reporting by Ismail Shakil in Bengaluru; editing by Jonathan Oatis and Alexander Smith)
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Did Future Lifestyle Fashions Limited's (NSE:FLFL) Recent Earnings Growth Beat The Trend?
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After looking at Future Lifestyle Fashions Limited's (NSE:FLFL) latest earnings announcement (31 March 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
Check out our latest analysis for Future Lifestyle Fashions
FLFL's trailing twelve-month earnings (from 31 March 2019) of ₹1.9b has jumped 50% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 73%, indicating the rate at which FLFL is growing has slowed down. What could be happening here? Well, let's examine what's occurring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Future Lifestyle Fashions has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. Furthermore, its return on assets (ROA) of 6.0% is below the IN Specialty Retail industry of 6.5%, indicating Future Lifestyle Fashions's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Future Lifestyle Fashions’s debt level, has increased over the past 3 years from 7.6% to 13%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 105% to 44% over the past 5 years.
Though Future Lifestyle Fashions's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Future Lifestyle Fashions to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for FLFL’s future growth? Take a look at ourfree research report of analyst consensusfor FLFL’s outlook.
2. Financial Health: Are FLFL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out ourfinancial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore ourfree list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Should You Worry About Future Lifestyle Fashions Limited's (NSE:FLFL) CEO Pay Cheque?
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Kishore Biyani has been the CEO of Future Lifestyle Fashions Limited (NSE:FLFL) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Future Lifestyle Fashions
According to our data, Future Lifestyle Fashions Limited has a market capitalization of ₹91b, and pays its CEO total annual compensation worth ₹29m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹9.6m. We examined companies with market caps from ₹69b to ₹221b, and discovered that the median CEO total compensation of that group was ₹39m.
That means Kishore Biyani receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Future Lifestyle Fashions has changed from year to year.
Over the last three years Future Lifestyle Fashions Limited has grown its earnings per share (EPS) by an average of 76% per year (using a line of best fit). Its revenue is up 27% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to checkthis free visual report onanalyst forecastsfor future earnings.
I think that the total shareholder return of 295%, over three years, would leave most Future Lifestyle Fashions Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Kishore Biyani is paid around what is normal the leaders of comparable size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want tocheck if insiders are buying Future Lifestyle Fashions shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out thisfreelist of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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How Worldpay Inc and Other Hedge Fund Darlings Performed in Q2
Insider Monkey tracks hedge funds, billionaires, and prominent value investors for a very simple reason: their consensus picks generally outperform the market. We aren’t the only research shop broadcasting this fact using a bullhorn. Here is what strategist Ben Snider said in Goldman Sachs’ periodic hedge fund report:
“Despite the strong track record of popular hedge fund stocks, investors often view high ownership as a negative trait when evaluating stock prospects. Clients often ask us to include hedge fund ownership data in stock screens, expressing a preference for buying ‘under-owned’ stocks.”
“In fact, during the past decade hedge fund popularity has been a more useful criterion for selecting stocks than valuations…. The signals from hedge fund popularity and valuation have been particularly useful in combination, especially for investors with slightly longer investment horizons. During the past decade, popular stocks have generally outperformed unpopular stocks across both 3- and 12-month investment horizons” Snider concluded.
It may sound like I am tooting my own horn, but Insider Monkey’s quarterly newsletter is actually superior to Goldman’s report. That’s because we separated the hedge fund favorites into long and short buckets. Our long bucket of hedge fund favorites returned 34.1% in the first half of 2019, whereas our short bucket of hedge fund favorites gained 21.4% during the same period. Hedge funds’ favorite top 20 stocks, on the other hand, returned 24% so far in 2019. You could have beaten the S&P 500 Index funds by 5.7 percentage points by investing inhedge funds’ top 20 picksin 2019, whereas you could have outperformed the index funds by 15.8 percentage points if you invested in our top hedge fund picks. You cantry out our newsletterfree of charge for 14 days to see hedge funds’ latest best stock picks.
The #24 most popular stock among the 743 hedge funds tracked by Insider Monkey wasWorldpay, Inc. (NYSE:WP).Worldpay was the 110th most popular stock among hedge funds at the end of December (see the30 most popular stocks among hedge funds). Overall hedge fund sentiment towards Worldpay is currently at its all time high. This is usually a very bullish signal. We observed this in other stocks like Roku,Control4 Corp, Uniqure,Avalara, Lindblad Expedition, andDisney.Roku returnedreturned 45%, Control4 Corp returned 40%,Uniqure and Avalara delivereda 30% gain each, andDisney outperformedthe market by 23 percentage points in Q2. Lindblad Expedition investors alsoexperienceda relatively modest 15.2% gain during the same period.
We have to warn you against indiscriminately imitating hedge funds' all stock picks. Hedge funds' top 20 stock picks outperformed the S&P 500 Index funds by 5.7 percentage points this year, but hedge funds' top 500 stock picks had the same return as the S&P 500 Index this quarter. Investing in a hedge fund's 35th best idea doesn't give you the same return as investing in a hedge fund's best idea.
[caption id="attachment_255014" align="aligncenter" width="450"]
Clint Carlson of Carlson Capital[/caption]
We're going to take a look at the latest hedge fund action encompassing Worldpay, Inc. (NYSE:WP).
Heading into the second quarter of 2019, a total of 75 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 56% from the previous quarter. By comparison, 45 hedge funds held shares or bullish call options in WP a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Worldpay, Inc. (NYSE:WP) was held bySelect Equity Group, which reported holding $525.8 million worth of stock at the end of March. It was followed by Citadel Investment Group with a $482.4 million position. Other investors bullish on the company included Diamond Hill Capital, Melvin Capital Management, and Steadfast Capital Management.
Consequently, key hedge funds were breaking ground themselves.Magnetar Capital, managed by Alec Litowitz and Ross Laser, assembled the largest position in Worldpay, Inc. (NYSE:WP). Magnetar Capital had $235.2 million invested in the company at the end of the quarter. Robert Emil Zoellner'sAlpine Associatesalso made a $166.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Aaron Cowen'sSuvretta Capital Management, Robert Boucai'sNewbrook Capital Advisors, and Clint Carlson'sCarlson Capital.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Worldpay, Inc. (NYSE:WP) but similarly valued. We will take a look at eBay Inc (NASDAQ:EBAY), Johnson Controls International plc (NYSE:JCI), Constellation Brands, Inc. (NYSE:STZ), and Manulife Financial Corporation (NYSE:MFC). This group of stocks' market values match WP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EBAY,48,3933951,6 JCI,25,727926,-1 STZ,38,2547745,-24 MFC,16,323863,-4 Average,31.75,1883371,-5.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 31.75 hedge funds with bullish positions and the average amount invested in these stocks was $1883 million. That figure was $5218 million in WP's case. eBay Inc (NASDAQ:EBAY) is the most popular stock in this table. On the other hand Manulife Financial Corporation (NYSE:MFC) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Worldpay, Inc. (NYSE:WP) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.4% in Q2 and outperformed the S&P 500 ETF (SPY) by more than 2 percentage points. Hedge funds were also right about betting on WP as the stock returned 8% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Focus Lighting and Fixtures Limited's (NSE:FOCUS) 31% ROE Better Than Average?
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One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. We'll use ROE to examine Focus Lighting and Fixtures Limited (NSE:FOCUS), by way of a worked example.
Our data showsFocus Lighting and Fixtures has a return on equity of 31%for the last year. One way to conceptualize this, is that for each ₹1 of shareholders' equity it has, the company made ₹0.31 in profit.
View our latest analysis for Focus Lighting and Fixtures
Theformula for ROEis:
Return on Equity = Net Profit ÷ Shareholders' Equity
Or for Focus Lighting and Fixtures:
31% = ₹98m ÷ ₹315m (Based on the trailing twelve months to March 2019.)
It's easy to understand the 'net profit' part of that equation, but 'shareholders' equity' requires further explanation. It is the capital paid in by shareholders, plus any retained earnings. Shareholders' equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
ROE looks at the amount a company earns relative to the money it has kept within the business. The 'return' is the amount earned after tax over the last twelve months. That means that the higher the ROE, the more profitable the company is. So, all else equal,investors should like a high ROE. That means it can be interesting to compare the ROE of different companies.
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As is clear from the image below, Focus Lighting and Fixtures has a better ROE than the average (8.4%) in the Electrical industry.
That is a good sign. We think a high ROE, alone, is usually enough to justify further research into a company. For example,I often check if insiders have been buying shares.
Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
Focus Lighting and Fixtures has a debt to equity ratio of just 0.098, which is very low. The combination of modest debt and a very impressive ROE does suggest that the business is high quality. Judicious use of debt to improve returns can certainly be a good thing, although it does elevate risk slightly and reduce future optionality.
Return on equity is useful for comparing the quality of different businesses. In my book the highest quality companies have high return on equity, despite low debt. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. Check the past profit growth by Focus Lighting and Fixtures by looking at thisvisualization of past earnings, revenue and cash flow.
But note:Focus Lighting and Fixtures may not be the best stock to buy. So take a peek at thisfreelist of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Focus Lighting and Fixtures Limited (NSE:FOCUS): The Best Of Both Worlds
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Focus Lighting and Fixtures Limited (NSE:FOCUS) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of FOCUS, it is a company with great financial health as well as a a strong history of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the fullreport on Focus Lighting and Fixtures here.
FOCUS delivered a bottom-line expansion of 64% in the prior year, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 31% return to shareholders, which paints a buoyant picture for the company. FOCUS's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that FOCUS manages its cash and cost levels well, which is a crucial insight into the health of the company. FOCUS seems to have put its debt to good use, generating operating cash levels of 1.98x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Focus Lighting and Fixtures, I've compiled three key factors you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for FOCUS’s future growth? Take a look at ourfree research report of analyst consensusfor FOCUS’s outlook.
2. Valuation: What is FOCUS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? Theintrinsic value infographic in our free research reporthelps visualize whether FOCUS is currently mispriced by the market.
3. Other Attractive Alternatives: Are there other well-rounded stocks you could be holding instead of FOCUS? Exploreour interactive list of stocks with large potentialto get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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Popular Joe Biden Website Reportedly Started By Trump Operative
Click here to read the full article. A popular website dedicated to 2020 presidential candidate Joe Biden was apparently created by a Republican operative to mock the former vice president. At first glance, JoeBiden.info looks like a pro-Biden site, and even sells T-shirts with his face on them. Related stories 'The View' Co-Host Meghan McCain On Biden Attacks: "Ageist Crap, I Hate It" Democratic Debate Night 2 Viewership Hits All-Time Debate High For Party Of FDR, JFK & HRC - Update Democratic Debate Night 2 Review: Joe Biden Takes A Beating But Keeps On Tickin', Kamala Harris Comes Out Swinging On NBC Stage But on closer inspection, the posts on the site make fun of the Democrat with gifs that show him touching women, and criticism of his political record, including his opposition to court-ordered busing in the 1970s, and a vote against abortion rights in 1982. A disclaimer at the bottom of the website says it’s “intended for entertainment and political commentary only and is therefore protected under fair use,” and is a project “BY AN American citizen FOR American citizens.” The New York Times reported Saturday, the site was indeed created by an American, just not one who backs Biden. The paper said Republican strategist Patrick Mauldin , who makes videos and other digital content for President Trump’s re-election campaign, is behind the site. Sign up for Deadline's Newsletter . For the latest news, follow us on Facebook , Twitter , and Instagram .
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Is Weis Markets, Inc. (WMK) A Good Stock To Buy ?
The first quarter was a breeze as Powell pivoted, and China seemed eager to reach a deal with Trump. Both the S&P 500 and Russell 2000 delivered very strong gains as a result, with the Russell 2000, which is composed of smaller companies, outperforming the large-cap stocks slightly during the first quarter. Unfortunately sentiment shifted in May as this time China pivoted and Trump put more pressure on China by increasing tariffs. Hedge funds' top 20 stock picks performed spectacularly in this volatile environment. These stocks delivered a total gain of 18.7% through May 30th, vs. a gain of 12.1% for the S&P 500 ETF. In this article we will look at how this market volatility affected the sentiment of hedge funds towards Weis Markets, Inc. (NYSE:WMK), and what that likely means for the prospects of the company and its stock.
IsWeis Markets, Inc. (NYSE:WMK)the right pick for your portfolio? Hedge funds are reducing their bets on the stock. The number of long hedge fund positions were cut by 2 lately. Our calculations also showed that WMK isn't among the30 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 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.
Let's take a look at the key hedge fund action encompassing Weis Markets, Inc. (NYSE:WMK).
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in WMK a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey,Royce & Associates, managed by Chuck Royce, holds the biggest position in Weis Markets, Inc. (NYSE:WMK). Royce & Associates has a $54.2 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second isArrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $11.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism encompass Jim Simons'sRenaissance Technologies, Cliff Asness'sAQR Capital Managementand Mario Gabelli'sGAMCO Investors.
Because Weis Markets, Inc. (NYSE:WMK) has faced bearish sentiment from hedge fund managers, it's safe to say that there lies a certain "tier" of funds that elected to cut their positions entirely heading into Q3. It's worth mentioning that Joel Greenblatt'sGotham Asset Managementdropped the biggest stake of the 700 funds watched by Insider Monkey, valued at about $1.1 million in stock, and John Overdeck and David Siegel's Two Sigma Advisors was right behind this move, as the fund sold off about $0.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 2 funds heading into Q3.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Weis Markets, Inc. (NYSE:WMK) but similarly valued. We will take a look at United Fire Group, Inc. (NASDAQ:UFCS), Frontline Ltd (NYSE:FRO), Easterly Government Properties Inc (NYSE:DEA), and Enterprise Financial Services Corp (NASDAQ:EFSC). This group of stocks' market valuations are closest to WMK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UFCS,10,14894,-1 FRO,10,32390,4 DEA,6,78261,1 EFSC,15,52852,0 Average,10.25,44599,1 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $83 million in WMK's case. Enterprise Financial Services Corp (NASDAQ:EFSC) is the most popular stock in this table. On the other hand Easterly Government Properties Inc (NYSE:DEA) is the least popular one with only 6 bullish hedge fund positions. Weis Markets, Inc. (NYSE:WMK) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately WMK wasn't nearly as popular as these 20 stocks and hedge funds that were betting on WMK were disappointed as the stock returned -8.7% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been More Bullish On Enterprise Financial Services Corp (EFSC)
"Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today's darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn't attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal," said Vilas Fund in itsQ1 investor letter. We aren't sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Enterprise Financial Services Corp (NASDAQ:EFSC).
Hedge fund interest inEnterprise Financial Services Corp (NASDAQ:EFSC)shares was flat at the end of last quarter. This is usually a negative indicator. 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 M/A-COM Technology Solutions Holdings (NASDAQ:MTSI), Canadian Solar Inc. (NASDAQ:CSIQ), and New Mountain Finance Corp. (NYSE:NMFC) to gather more data points.
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.
Let's go over the recent hedge fund action regarding Enterprise Financial Services Corp (NASDAQ:EFSC).
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in EFSC over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Jim Simons'sRenaissance Technologieshas the biggest position in Enterprise Financial Services Corp (NASDAQ:EFSC), worth close to $20 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot isElizabeth Park Capital Management, managed by Fred Cummings, which holds a $11.7 million position; 4.7% of its 13F portfolio is allocated to the stock. Other peers that hold long positions contain Paul Marshall and Ian Wace'sMarshall Wace LLP, Ken Griffin'sCitadel Investment Groupand Brian Ashford-Russell and Tim Woolley'sPolar Capital.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position:HBK Investments. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund wasExodusPoint Capital).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Enterprise Financial Services Corp (NASDAQ:EFSC) but similarly valued. These stocks are MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI), Canadian Solar Inc. (NASDAQ:CSIQ), New Mountain Finance Corp. (NYSE:NMFC), and Pacific Biosciences of California, Inc. (NASDAQ:PACB). All of these stocks' market caps match EFSC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MTSI,16,134289,1 CSIQ,11,122280,0 NMFC,9,26087,-2 PACB,19,241025,-2 Average,13.75,130920,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $53 million in EFSC's case. Pacific Biosciences of California, Inc. (NASDAQ:PACB) is the most popular stock in this table. On the other hand New Mountain Finance Corp. (NYSE:NMFC) is the least popular one with only 9 bullish hedge fund positions. Enterprise Financial Services Corp (NASDAQ:EFSC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately EFSC wasn't nearly as popular as these 20 stocks and hedge funds that were betting on EFSC were disappointed as the stock returned 1.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Did Hedge Funds Drop The Ball On Winnebago Industries, Inc. (WGO) ?
"The global economic environment is very favorable for investors. Economies are generally strong, but not too strong. Employment levels are among the strongest for many decades. Interest rates are paused at very low levels, and the risk of significant increases in the medium term seems low. Financing for transactions is freely available to good borrowers, but not in major excess. Covenants are lighter than they were five years ago, but the extreme excesses seen in the past do not seem prevalent yet today. Despite this apparent ‘goldilocks’ market environment, we continue to worry about a world where politics are polarized almost everywhere, interest rates are low globally, and equity valuations are at their peak," are the words ofBrookfield Asset Management. Brookfield was right about politics as stocks experienced their second worst May since the 1960s due to escalation of trade disputes. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Winnebago Industries, Inc. (NYSE:WGO) and see how it was affected.
Hedge fund interest inWinnebago Industries, Inc. (NYSE:WGO)shares was flat at the end of last quarter. This is usually a negative indicator. 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 Tactile Systems Technology, Inc. (NASDAQ:TCMD), Intersect ENT Inc (NASDAQ:XENT), and Atkore International Group Inc. (NYSE:ATKR) to gather more data points.
If you'd ask most investors, hedge funds are viewed as unimportant, outdated investment vehicles of the past. While there are more than 8000 funds trading at the moment, We choose to focus on the upper echelon of this club, approximately 750 funds. It is estimated that this group of investors control the lion's share of all hedge funds' total asset base, and by following their unrivaled stock picks, Insider Monkey has uncovered a number of investment strategies that have historically outperformed the S&P 500 index. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a glance at the recent hedge fund action surrounding Winnebago Industries, Inc. (NYSE:WGO).
Heading into the second quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WGO over the last 15 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey,Punch Card Capital, managed by Norbest Lou, holds the biggest position in Winnebago Industries, Inc. (NYSE:WGO). Punch Card Capital has a $33.3 million position in the stock, comprising 15.7% of its 13F portfolio. Coming in second isRoyce & Associates, managed by Chuck Royce, which holds a $30.5 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise Brad Dunkley and Blair Levinsky'sWaratah Capital Advisors, Clint Carlson'sCarlson Capitaland Jim Simons'sRenaissance Technologies.
Due to the fact that Winnebago Industries, Inc. (NYSE:WGO) has experienced falling interest from the entirety of the hedge funds we track, we can see that there were a few hedgies that elected to cut their full holdings by the end of the third quarter. Interestingly, Michael Platt and William Reeves'sBlueCrest Capital Mgmt.cut the biggest position of the 700 funds followed by Insider Monkey, valued at close to $0.4 million in stock. Peter Algert and Kevin Coldiron's fund,Algert Coldiron Investors, also dropped its stock, about $0.3 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to Winnebago Industries, Inc. (NYSE:WGO). We will take a look at Tactile Systems Technology, Inc. (NASDAQ:TCMD), Intersect ENT Inc (NASDAQ:XENT), Atkore International Group Inc. (NYSE:ATKR), and Carbon Black, Inc. (NASDAQ:CBLK). All of these stocks' market caps match WGO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TCMD,17,80188,3 XENT,23,263913,3 ATKR,19,104262,2 CBLK,19,59849,2 Average,19.5,127053,2.5 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $121 million in WGO's case. Intersect ENT Inc (NASDAQ:XENT) is the most popular stock in this table. On the other hand Tactile Systems Technology, Inc. (NASDAQ:TCMD) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Winnebago Industries, Inc. (NYSE:WGO) is even less popular than TCMD. Hedge funds clearly dropped the ball on WGO as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on WGO as the stock returned 29.2% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On InflaRx N.V. (IFRX)
Does InflaRx N.V. (NASDAQ:IFRX) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
InflaRx N.V. (NASDAQ:IFRX)was in 15 hedge funds' portfolios at the end of March. IFRX shareholders have witnessed an increase in hedge fund interest recently. There were 13 hedge funds in our database with IFRX holdings at the end of the previous quarter. Our calculations also showed that IFRX isn't among the30 most popular stocks among hedge funds.
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 has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We're going to take a gander at the key hedge fund action surrounding InflaRx N.V. (NASDAQ:IFRX).
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards IFRX over the last 15 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.
More specifically,RA Capital Managementwas the largest shareholder of InflaRx N.V. (NASDAQ:IFRX), with a stake worth $106.2 million reported as of the end of March. Trailing RA Capital Management was Cormorant Asset Management, which amassed a stake valued at $97.9 million. Adage Capital Management, Redmile Group, and Rock Springs Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, key money managers have been driving this bullishness.Kingdon Capital, managed by Mark Kingdon, created the largest position in InflaRx N.V. (NASDAQ:IFRX). Kingdon Capital had $6.6 million invested in the company at the end of the quarter. Jim Simons'sRenaissance Technologiesalso made a $2.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Michael Platt and William Reeves'sBlueCrest Capital Mgmt..
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as InflaRx N.V. (NASDAQ:IFRX) but similarly valued. We will take a look at Third Point Reinsurance Ltd (NYSE:TPRE), FB Financial Corporation (NYSE:FBK), Kadant Inc. (NYSE:KAI), and GoPro Inc (NASDAQ:GPRO). All of these stocks' market caps are similar to IFRX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TPRE,19,76399,1 FBK,5,100875,-3 KAI,17,93212,0 GPRO,23,183454,10 Average,16,113485,2 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $113 million. That figure was $411 million in IFRX's case. GoPro Inc (NASDAQ:GPRO) is the most popular stock in this table. On the other hand FB Financial Corporation (NYSE:FBK) is the least popular one with only 5 bullish hedge fund positions. InflaRx N.V. (NASDAQ:IFRX) 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 thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately IFRX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); IFRX investors were disappointed as the stock returned -91.2% 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 thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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The Crypto Week – Bitcoin Leads the Way as Volatility Grips the Majors
While the Bitcoin bulls maintained control, it has been a mixed week for the rest of the pack.
Bitcoin fell by 3.38% on Saturday. Partially reversing a 10.18% rally from Friday, Bitcoin ended the day at $11,920.
A bearish start to the day saw Bitcoin slide from an intraday high $12,338 to an early morning intraday low $11,354.
Bitcoin steered clear of the first major support level at $11,285.67 and the 23.6% FIB of $11,275 before finding support.
Recovering through the remainder of the day, Bitcoin moved back through to $12,000 levels before a late pullback.
For the current week, Bitcoin was up by 9.3%, which came off the back of 4 days in the green out of the last 6.
Across the rest of the top 10 cryptos, it was a bullish start to the weekend, leaving Bitcoin to buck the trend on the day.
Across the rest of the majors, Litecoin led the way, rallying by 11.6% to reverse most of a Thursday 12.6% sell-off.
Stellar’s Lumen (+3.87%), EOS (+2.59%), and Ethereum (+2.46%) saw solid gains on the day.
For the current week, Bitcoin led the way with its 9.3% rally, Monday through Saturday.
Stellar’s Lumen and Ethereum were also in the green for the current week, with gains of 8% and 3.3% respectively.
The rest of the pack were in the red, however, with a broad-based crypto sell-off doing the damage on Thursday.
Leading the way down was EOS, which tumbled by 13%. Bitcoin Cash SV and Ripple’s XRP also saw heavy losses, with declines of 10.2% and 9.4% respectively.
Bitcoin Cash ABC (-6.34%), Binance Coin (-4.35%) and Litecoin (-2.52%) saw more modest losses on the week.
A choppy week saw the total crypto market cap rise from $324bn to a Thursday high $386.6bn before easing back. At the time of writing, the total crypto market cap stood at $344.83bn.
24-hour trading volumes were also on the up, rising from $70.7bn levels to hit $140bn levels on Thursday. At the time of writing, 24-hour trading volumes stood at $88.43bn.
At the time of writing, Bitcoin was up by 1.88% to $12,144.0.
A bullish start to the day saw Bitcoin rise from a morning low $11,920 to a high $12,193 before easing back.
Bitcoin left the major support and resistance levels untested early on.
Across the rest of the majors, it was a mixed start to the day. Ethereum (+0.71%), EOS (+0.22%), Ripple’s XRP (+0.22%) and Bitcoin Cash ABC (+0.66%) were in positive territory.
On the slide, however, were Stellar’s Lumen (-1.2%), Litecoin (-0.98%), and Binance Coin (-1.64%).
Bitcoin Cash SV was flat with just a 0.05% loss at the time of writing.
Bitcoin would need to hold onto $12,000 levels through the morning to support another run at the first major resistance level at $12,390.33.
An early move through the morning high $12,193 to $12,200 levels would signal the start of a more material rally on the day.
Bitcoin would need the support of the broader market for a break out from the first major resistance level. Barring a broad-based crypto rally, Bitcoin will likely come up short of the second major resistance level at $12,860.67.
Failure to hold onto $12,000 levels could see Bitcoin hit reverse. A fall through to $11,850 levels would bring the first major support level at $11,397.33 into play.
Barring a broad-based crypto sell-off, Bitcoin should steer clear of sub-$11,000 support levels on the day.
Get Into Cryptocurrency Trading Today
Thisarticlewas originally posted on FX Empire
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Is Alder Biopharmaceuticals Inc (ALDR) A Good Stock To Buy ?
It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The Standard and Poor’s 500 Index returned approximately 12.1% in the first 5 months of this year (through May 30th). Conversely, hedge funds’ top 20 large-cap stock picks generated a return of 18.7% during the same 5-month period, with the majority of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds' stock picks generate superior risk-adjusted returns. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Alder Biopharmaceuticals Inc (NASDAQ:ALDR).
Alder Biopharmaceuticals Inc (NASDAQ:ALDR)shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 15 hedge funds' portfolios at the end of March. 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 Republic Bancorp, Inc. KY (NASDAQ:RBCAA), Roan Resources, Inc. (NYSE:ROAN), and Quantenna Communications, Inc. (NASDAQ:QTNA) to gather more data points.
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 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.
Let's take a gander at the recent hedge fund action surrounding Alder Biopharmaceuticals Inc (NASDAQ:ALDR).
At Q1's end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2018. On the other hand, there were a total of 17 hedge funds with a bullish position in ALDR a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds,Redmile Groupheld the most valuable stake in Alder Biopharmaceuticals Inc (NASDAQ:ALDR), which was worth $88.8 million at the end of the first quarter. On the second spot was Samlyn Capital which amassed $43.5 million worth of shares. Moreover, Citadel Investment Group, Foresite Capital, and Partner Fund Management were also bullish on Alder Biopharmaceuticals Inc (NASDAQ:ALDR), allocating a large percentage of their portfolios to this stock.
Since Alder Biopharmaceuticals Inc (NASDAQ:ALDR) has faced bearish sentiment from the aggregate hedge fund industry, it's safe to say that there was a specific group of funds that slashed their positions entirely last quarter. At the top of the heap, Steve Cohen'sPoint72 Asset Managementdropped the biggest stake of all the hedgies followed by Insider Monkey, totaling about $4.6 million in stock, and Jerome Pfund and Michael Sjostrom's Sectoral Asset Management was right behind this move, as the fund sold off about $1.3 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Alder Biopharmaceuticals Inc (NASDAQ:ALDR) but similarly valued. We will take a look at Republic Bancorp, Inc. (NASDAQ:RBCAA), Roan Resources, Inc. (NYSE:ROAN), Quantenna Communications, Inc. (NASDAQ:QTNA), and The Chefs Warehouse, Inc (NASDAQ:CHEF). This group of stocks' market values resemble ALDR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RBCAA,7,16406,0 ROAN,18,310071,4 QTNA,23,173264,1 CHEF,10,46595,0 Average,14.5,136584,1.25 [/table]
View table hereif 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 $137 million. That figure was $325 million in ALDR's case. Quantenna Communications, Inc. (NASDAQ:QTNA) is the most popular stock in this table. On the other hand Republic Bancorp, Inc. KY (NASDAQ:RBCAA) is the least popular one with only 7 bullish hedge fund positions. Alder Biopharmaceuticals Inc (NASDAQ:ALDR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ALDR wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ALDR were disappointed as the stock returned -15.4% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Is Tidewater Inc. (TDW) A Good Stock To Buy ?
At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.
IsTidewater Inc. (NYSE:TDW)ready to rally soon? Prominent investors are taking an optimistic view. The number of long hedge fund positions advanced by 1 in recent months. Our calculations also showed that TDW isn't among the30 most popular stocks among hedge funds.
If you'd ask most investors, hedge funds are assumed to be underperforming, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading today, Our researchers hone in on the masters of this group, approximately 750 funds. These hedge fund managers administer most of all hedge funds' total capital, and by monitoring their highest performing equity investments, Insider Monkey has discovered a number of investment strategies that have historically beaten the broader indices. Insider Monkey's flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in ourlatest quarterly updateand they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We're going to take a glance at the recent hedge fund action surrounding Tidewater Inc. (NYSE:TDW).
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TDW over the last 15 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey,Third Avenue Management, managed by Martin Whitman, holds the number one position in Tidewater Inc. (NYSE:TDW). Third Avenue Management has a $57 million position in the stock, comprising 4.4% of its 13F portfolio. On Third Avenue Management's heels isRaging Capital Management, managed by William C. Martin, which holds a $56.1 million position; the fund has 8.1% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish contain Amit Wadhwaney'sMoerus Capital Management, Joshua Friedman and Mitchell Julis'sCanyon Capital Advisorsand Robert Rodriguez and Steven Romick'sFirst Pacific Advisors LLC.
Consequently, specific money managers were breaking ground themselves.Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most outsized position in Tidewater Inc. (NYSE:TDW). Marshall Wace LLP had $0.5 million invested in the company at the end of the quarter.
Let's now take a look at hedge fund activity in other stocks similar to Tidewater Inc. (NYSE:TDW). We will take a look at NorthStar Realty Europe Corp. (NYSE:NRE), Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (NYSE:EDN), Griffon Corporation (NYSE:GFF), and Tucows Inc. (NASDAQ:TCX). This group of stocks' market caps are similar to TDW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NRE,9,98233,-4 EDN,5,12274,-1 GFF,7,127227,-7 TCX,10,65510,3 Average,7.75,75811,-2.25 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $216 million in TDW's case. Tucows Inc. (NASDAQ:TCX) is the most popular stock in this table. On the other hand Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (NYSE:EDN) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Tidewater Inc. (NYSE:TDW) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately TDW wasn't nearly as popular as these 20 stocks and hedge funds that were betting on TDW were disappointed as the stock returned -1.3% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Hedge Funds Have Never Been This Bullish On Computer Programs & Systems, Inc. (CPSI)
A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell's pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of Computer Programs & Systems, Inc. (NASDAQ:CPSI) during the quarter.
Computer Programs & Systems, Inc. (NASDAQ:CPSI)has experienced an increase in hedge fund sentiment in recent months.CPSIwas in 18 hedge funds' portfolios at the end of March. There were 13 hedge funds in our database with CPSI positions at the end of the previous quarter. Our calculations also showed that CPSI isn't among the30 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 glance at the recent hedge fund action surrounding Computer Programs & Systems, Inc. (NASDAQ:CPSI).
Heading into the second quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CPSI over the last 15 quarters. With hedgies' capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
The largest stake in Computer Programs & Systems, Inc. (NASDAQ:CPSI) was held byMillennium Management, which reported holding $16 million worth of stock at the end of March. It was followed by D E Shaw with a $6.3 million position. Other investors bullish on the company included Marshall Wace LLP, Arrowstreet Capital, and Citadel Investment Group.
Now, key hedge funds have jumped into Computer Programs & Systems, Inc. (NASDAQ:CPSI) headfirst.Millennium Management, managed by Israel Englander, created the biggest call position in Computer Programs & Systems, Inc. (NASDAQ:CPSI). Millennium Management had $3 million invested in the company at the end of the quarter. Ken Griffin'sCitadel Investment Groupalso initiated a $2.6 million position during the quarter. The following funds were also among the new CPSI investors: Bradley Louis Radoff'sFondren Management, Jim Simons'sRenaissance Technologies, and Matthew Hulsizer'sPEAK6 Capital Management.
Let's also examine hedge fund activity in other stocks similar to Computer Programs & Systems, Inc. (NASDAQ:CPSI). We will take a look at Kaleido BioSciences, Inc. (NASDAQ:KLDO), OptiNose, Inc. (NASDAQ:OPTN), Daqo New Energy Corp (NYSE:DQ), and Old Line Bancshares, Inc. (MD) (NASDAQ:OLBK). This group of stocks' market caps are similar to CPSI's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KLDO,6,17238,6 OPTN,3,6910,-3 DQ,5,9512,-6 OLBK,9,37248,0 Average,5.75,17727,-0.75 [/table]
View table hereif you experience formatting issues.
As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $46 million in CPSI's case. Old Line Bancshares, Inc. (MD) (NASDAQ:OLBK) is the most popular stock in this table. On the other hand OptiNose, Inc. (NASDAQ:OPTN) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Computer Programs & Systems, Inc. (NASDAQ:CPSI) is more popular among hedge funds. Our calculations showed thattop 20 most popular stocksamong hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately CPSI wasn't nearly as popular as these 20 stocks and hedge funds that were betting on CPSI were disappointed as the stock returned -9.9% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out thetop 20 most popular stocksamong hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published atInsider Monkey.
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Here’s What Firstsource Solutions Limited’s (NSE:FSL) Return On Capital Can Tell Us
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Today we are going to look at Firstsource Solutions Limited (NSE:FSL) to see whether it might be an attractive investment prospect. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.
First up, we'll look at what ROCE is and how we calculate it. Second, we'll look at its ROCE compared to similar companies. Last but not least, we'll look at what impact its current liabilities have on its ROCE.
ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. All else being equal, a better business will have a higher ROCE. Overall, it is a valuable metric that has its flaws. Renowned investment researcher Michael Mauboussinhas suggestedthat a high ROCE can indicate that 'one dollar invested in the company generates value of more than one dollar'.
Analysts use this formula to calculate return on capital employed:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
Or for Firstsource Solutions:
0.17 = ₹4.6b ÷ (₹37b - ₹8.9b) (Based on the trailing twelve months to March 2019.)
Therefore,Firstsource Solutions has an ROCE of 17%.
Check out our latest analysis for Firstsource Solutions
ROCE can be useful when making comparisons, such as between similar companies. We can see Firstsource Solutions's ROCE is around the 14% average reported by the IT industry. Regardless of where Firstsource Solutions sits next to its industry, its ROCE in absolute terms appears satisfactory, and this company could be worth a closer look.
You can click on the image below to see (in greater detail) how Firstsource Solutions's past growth compares to other companies.
When considering this metric, keep in mind that it is backwards looking, and not necessarily predictive. ROCE can be misleading for companies in cyclical industries, with returns looking impressive during the boom times, but very weak during the busts. ROCE is only a point-in-time measure. What happens in the future is pretty important for investors, so we have prepared afreereport on analyst forecasts for Firstsource Solutions.
Short term (or current) liabilities, are things like supplier invoices, overdrafts, or tax bills that need to be paid within 12 months. The ROCE equation subtracts current liabilities from capital employed, so a company with a lot of current liabilities appears to have less capital employed, and a higher ROCE than otherwise. To check the impact of this, we calculate if a company has high current liabilities relative to its total assets.
Firstsource Solutions has total liabilities of ₹8.9b and total assets of ₹37b. As a result, its current liabilities are equal to approximately 24% of its total assets. A fairly low level of current liabilities is not influencing the ROCE too much.
Overall, Firstsource Solutions has a decent ROCE and could be worthy of further research. Firstsource Solutions looks strong on this analysis,but there are plenty of other companies that could be a good opportunity. Here is afree listof companies growing earnings rapidly.
I will like Firstsource Solutions better if I see some big insider buys. While we wait, check out thisfreelist of growing companies with considerable, recent, insider buying.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor ateditorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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