There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Silgan Holdings Inc. (NASDAQ:SLGN).
Silgan Holdings Inc. (NASDAQ:SLGN) investors should be aware of a decrease in hedge fund sentiment in recent months. There were 11 hedge funds in our database with SLGN positions at the end of the previous quarter. At the end of this article we will also compare SLGN to other stocks including Federated Investors Inc (NYSE:FII), Valmont Industries, Inc. (NYSE:VMI), and Ciena Corporation (NASDAQ:CIEN) to get a better sense of its popularity.
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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With all of this in mind, let’s check out the key action surrounding Silgan Holdings Inc. (NASDAQ:SLGN).
How are hedge funds trading Silgan Holdings Inc. (NASDAQ:SLGN)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 18% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SLGN over the last 5 quarters. So, let’s find out 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, Amy Minella’s Cardinal Capital holds the largest position in Silgan Holdings Inc. (NASDAQ:SLGN). According to regulatory filings, the fund has a $57.9 million position in the stock, comprising 2.7% of its 13F portfolio. Sitting at the No. 2 spot is Clint Carlson’s Carlson Capital which holds a $48.6 million position. Some other members of the smart money with similar optimism encompass Ken Griffin’s Citadel Investment Group, D E Shaw, which is one of the biggest hedge funds in the world, and Roger Ibbotson’s Zebra 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.
Since Silgan Holdings Inc. (NASDAQ:SLGN) has sustained bearish sentiment from hedge fund managers, we can see that there is a sect of money managers that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Joel Greenblatt’s Gotham Asset Management said goodbye to the largest position of the 700 funds monitored by Insider Monkey, comprising an estimated $2.8 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dropped about $1.6 million worth of SLGN shares.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Silgan Holdings Inc. (NASDAQ:SLGN) but similarly valued. We will take a look at Federated Investors Inc (NYSE:FII), Valmont Industries, Inc. (NYSE:VMI), Ciena Corporation (NASDAQ:CIEN), and Mercury General Corporation (NYSE:MCY). This group of stocks’ market caps are similar to SLGN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FII | 22 | 218766 | 6 |
| VMI | 21 | 341199 | -2 |
| CIEN | 24 | 274755 | -2 |
| MCY | 10 | 32980 | 1 |
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 $217 million. That figure was $147 million in SLGN’s case. Ciena Corporation (NASDAQ:CIEN) is the most popular stock in this table. On the other hand Mercury General Corporation (NYSE:MCY) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Silgan Holdings Inc. (NASDAQ:SLGN) is even less popular than MCY. 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. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None
