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Hedge Funds Are Crazy About Esterline Technologies Corporation (ESL)

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Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Is Esterline Technologies Corporation (NYSE:ESL) a good investment today? Investors who are in the know are taking a bullish view. The number of long hedge fund bets that are revealed through the 13F filings swelled by 8 in recent months. ESL was in 18 hedge funds’ portfolios at the end of September. There were 10 hedge funds in our database with ESL holdings at the end of the previous quarter. At the end of this article we will also compare ESL to other stocks including Mueller Industries, Inc. (NYSE:MLI), Lithia Motors Inc (NYSE:LAD), and Och-Ziff Capital Management Group LLC (NYSE:OZM) to get a better sense of its popularity.

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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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Hedge fund activity in Esterline Technologies Corporation (NYSE:ESL)

At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 80% gain from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ESL over the last 5 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 significantly (or already accumulated large positions).

esl
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC has the number one position in Esterline Technologies Corporation (NYSE:ESL), worth close to $280.6 million, corresponding to 2.3% of its total 13F portfolio. Sitting at the No. 2 spot is North Run Capital, led by Thomas Ellis and Todd Hammer, holding a $34.2 million position; the fund has 5.4% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Cliff Asness’ AQR Capital Management, and Ed Bosek’s BeaconLight Capital. We should note that none of these hedge funds are 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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