Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. The second half of 2015 and the first few months of this year was a stressful period for hedge funds. However, things have been taking a turn for the better in the second half of this year. Small-cap stocks which hedge funds are usually overweight outperformed the market by double digits and it may be a good time to pay attention to hedge funds’ picks before it is too late. In this article we are going to analyze the hedge fund sentiment towards Endurance Specialty Holdings Ltd. (NYSE:ENH) to find out whether it was one of their high conviction long-term ideas.
Endurance Specialty Holdings Ltd. (NYSE:ENH) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 18 hedge funds’ portfolios at the end of September. 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 Randgold Resources Ltd. (ADR) (NASDAQ:GOLD), HEICO Corporation (NYSE:HEI), and Guidewire Software Inc (NYSE:GWRE) to gather more data points.
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.
What does the smart money think about Endurance Specialty Holdings Ltd. (NYSE:ENH)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the previous quarter. The graph below displays the number of hedge funds with bullish position in ENH over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Ric Dillon’s Diamond Hill Capital holds the number one position in Endurance Specialty Holdings Ltd. (NYSE:ENH), which has a $67 million position in the stock. On Diamond Hill Capital’s heels is Richard S. Pzena to Pzena Investment Management, which holds a $53.4 million position. Some other professional money managers that are bullish contain Israel Englander’s Millennium Management, Scott Wallace’s Wallace Capital Management and Cliff Asness’ AQR Capital Management. 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.