Do Hedge Funds Love SJW Corp. (SJW)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider SJW Group (NYSE:SJW) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is SJW Group (NYSE:SJW) a buy, sell, or hold? Hedge funds are reducing their bets on the stock. The number of bullish hedge fund positions were cut by 1 lately. Our calculations also showed that sjw isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Mario Gabelli

We’re going to review the fresh hedge fund action encompassing SJW Group (NYSE:SJW).

How have hedgies been trading SJW Group (NYSE:SJW)?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in SJW at the beginning of this year. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

No of Hedge Funds with SJW Positions

Of the funds tracked by Insider Monkey, Jim Simons’s Renaissance Technologies has the largest position in SJW Group (NYSE:SJW), worth close to $38.4 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Royce & Associates, led by Chuck Royce, holding a $20.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Mario Gabelli’s GAMCO Investors, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.

Since SJW Group (NYSE:SJW) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of fund managers who sold off their entire stakes by the end of the third quarter. At the top of the heap, Alec Litowitz and Ross Laser’s Magnetar Capital said goodbye to the largest stake of all the hedgies monitored by Insider Monkey, valued at an estimated $16 million in stock. Andrew Feldstein and Stephen Siderow’s fund, Blue Mountain Capital, also sold off its stock, about $0.7 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as SJW Group (NYSE:SJW) but similarly valued. We will take a look at Tailored Brands, Inc. (NYSE:TLRD), ArcBest Corp (NASDAQ:ARCB), Endocyte, Inc. (NASDAQ:ECYT), and NeoGenomics, Inc. (NASDAQ:NEO). This group of stocks’ market caps resemble SJW’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TLRD 23 103039 -1
ARCB 14 77690 -2
ECYT 27 540428 9
NEO 17 26803 4
Average 20.25 186990 2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $187 million. That figure was $79 million in SJW’s case. Endocyte, Inc. (NASDAQ:ECYT) is the most popular stock in this table. On the other hand ArcBest Corp (NASDAQ:ARCB) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks SJW Group (NYSE:SJW) is even less popular than ARCB. 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. This article was originally published at Insider Monkey.