Endurance Specialty Holdings Ltd. (ENH): Are Hedge Funds Right About This Stock?

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Wallace Capital Management, managed by Scott Wallace, initiated the biggest position in Endurance Specialty Holdings Ltd. (NYSE:ENH), valued at $36.5 million as noted above. Chao Ku’s Nine Chapters Capital Management also made a $3.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Jay Petschek and Steven Major’s Corsair Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Matthew Tewksbury’s Stevens Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Endurance Specialty Holdings Ltd. (NYSE:ENH) but similarly valued. We will take a look at Cullen/Frost Bankers, Inc. (NYSE:CFR), Mercadolibre Inc (NASDAQ:MELI), IPG Photonics Corporation (NASDAQ:IPGP), and Casey’s General Stores, Inc. (NASDAQ:CASY). All of these stocks’ market caps resemble ENH’s market cap.

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 $161 million. In the case of ENH, that figure was $228 million. IPG Photonics Corporation (NASDAQ:IPGP) is the star of this group, while Mercadolibre Inc (NASDAQ:MELI) is the outsider with only 14 bullish hedge fund positions. Endurance Specialty Holdings Ltd. (NYSE:ENH) 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 IPGP might be a better candidate to consider a long position.