Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of EnLink Midstream LLC (NYSE:ENLC) based on that data.
EnLink Midstream LLC (NYSE:ENLC) investors should be aware of a decrease in activity from the world’s largest hedge funds recently. At the end of this article we will also compare ENLC to other stocks, including ITT Corp (NYSE:ITT), Methanex Corporation (USA) (NASDAQ:MEOH), and Cognex Corporation (NASDAQ:CGNX) to get a better sense of its popularity.
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In the eyes of most stock holders, hedge funds are seen as worthless, outdated investment vehicles of the past. While there are over 8000 funds with their doors open today, We look at the leaders of this group, about 700 funds. These investment experts control most of the hedge fund industry’s total capital, and by keeping an eye on their highest performing stock picks, Insider Monkey has unsheathed a few investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Keeping this in mind, let’s view the key action encompassing EnLink Midstream LLC (NYSE:ENLC).
How are hedge funds trading EnLink Midstream LLC (NYSE:ENLC)?
At the Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Stuart J. Zimmer’s Zimmer Partners has the biggest position in EnLink Midstream LLC (NYSE:ENLC), worth close to $31.3 million, corresponding to 2.4% of its total 13F portfolio. The second most bullish fund is D E Shaw, which holds a $12.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions contain Israel Englander’s Millennium Management, David Atterbury’s Whetstone Capital Advisors and Sander Gerber’s Hudson Bay Capital Management.
Because EnLink Midstream LLC (NYSE:ENLC) has witnessed falling interest from the smart money, we can see that there lies a certain “tier” of hedge funds that elected to cut their positions entirely by the end of the third quarter. Interestingly, Michael Platt and William Reeves’s BlueCrest Capital Mgmt. dumped the biggest investment of all the hedgies monitored by Insider Monkey, worth about $0.3 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also cut its position, about $0.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to EnLink Midstream LLC (NYSE:ENLC). We will take a look at ITT Corp (NYSE:ITT), Methanex Corporation (USA) (NASDAQ:MEOH), Cognex Corporation (NASDAQ:CGNX), and United States Cellular Corporation (NYSE:USM). This group of stocks’ market caps are closest to ENLC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ITT | 27 | 277938 | -3 |
| MEOH | 19 | 229003 | -3 |
| CGNX | 14 | 127632 | -8 |
| USM | 12 | 147318 | -3 |
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 $195 million. That figure was just $59 million in ENLC’s case. ITT Corp (NYSE:ITT) is the most popular stock in this table and United States Cellular Corporation (NYSE:USM) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks EnLink Midstream LLC (NYSE:ENLC) is even less popular than USM. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.