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 September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is ENSCO PLC (NYSE:ESV), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is ENSCO PLC (NYSE:ESV) a buy right now? Hedge funds are buying. The number of long hedge fund bets rose by 7 in recent months. 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 First Horizon National Corporation (NYSE:FHN), AngloGold Ashanti Limited (ADR) (NYSE:AU), and American Capital Ltd. (NASDAQ:ACAS) to gather more data points.
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If you’d ask most investors, hedge funds are seen as slow, outdated investment vehicles of the past. While there are over 8000 funds with their doors open at present, Our experts choose to focus on the aristocrats of this club, approximately 700 funds. It is estimated that this group of investors direct bulk of the hedge fund industry’s total capital, and by keeping an eye on their inimitable equity investments, Insider Monkey has formulated numerous investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, let’s review the fresh action encompassing ENSCO PLC (NYSE:ESV).
How are hedge funds trading ENSCO PLC (NYSE:ESV)?
At Q3’s end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 32% from the second quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Phill Gross and Robert Atchinson’s Adage Capital Management has the most valuable position in ENSCO PLC (NYSE:ESV), worth close to $73.3 million, corresponding to 0.2% of its total 13F portfolio. Coming in second is Huber Capital Management, run by Joe Huber, which holds a $59.2 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Other peers that are bullish consist of Israel Englander’s Millennium Management, Ray Dalio’s Bridgewater Associates and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the biggest call position in ENSCO PLC (NYSE:ESV). The fund had $10.2 million invested in the company at the end of the quarter. George Hall’s Clinton Group also initiated a $8.8 million position during the quarter. The following funds were also among the new ESV investors: Peter Muller’s PDT Partners, Cliff Asness’s AQR Capital Management, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
Let’s check out hedge fund activity in other stocks similar to ENSCO PLC (NYSE:ESV). These stocks are First Horizon National Corporation (NYSE:FHN), AngloGold Ashanti Limited (ADR) (NYSE:AU), American Capital Ltd. (NASDAQ:ACAS), and RLJ Lodging Trust (NYSE:RLJ). All of these stocks’ market caps match ESV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FHN | 16 | 166123 | -2 |
| AU | 15 | 495127 | -3 |
| ACAS | 36 | 1095174 | -2 |
| RLJ | 9 | 116093 | -3 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $468 million. That figure was $298 million in ESV’s case. American Capital Ltd. (NASDAQ:ACAS) is the most popular stock in this table, while RLJ Lodging Trust (NYSE:RLJ) is limping behind with only 9 bullish hedge fund positions. ENSCO PLC (NYSE:ESV) 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. In this regard ACAS might be a better candidate to consider a long position.
