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Emcor Group Inc (EME): Are Hedge Funds Right About This Stock?

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The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Emcor Group Inc (NYSE:EME).

Is Emcor Group Inc (NYSE:EME) a good investment now? Prominent investors seem to be taking a pessimistic view. The number of bullish hedge fund positions retreated by three to 17 during the third quarter. However, 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 Lions Gate Entertainment Corp. (USA) (NYSE:LGF), NuVasive, Inc. (NASDAQ:NUVA), and Two Harbors Investment Corp (NYSE:TWO) to gather more data points.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, let’s take a glance at the new action encompassing Emcor Group Inc (NYSE:EME).

Hedge fund activity in Emcor Group Inc (NYSE:EME)

At the end of September, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on Emcor Group, down by 15% from the end of the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in EME over the last five quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

HedgeFundSentimentChart

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chuck Royce’s Royce & Associates has the most valuable position in Emcor Group Inc (NYSE:EME), worth close to $53.9 million, corresponding to 0.4% of its total 13F portfolio. The second largest stake is held by Cliff Asness’ AQR Capital Management holding a $10.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise Israel Englander’s Millennium Management, Matthew Lindenbaum’s Basswood Capital, and Tim Curro’s Value Holdings LP. We should note that Value Holdings LP is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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