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Ennis, Inc. (EBF): Hedge Fund Sentiment Unchanged

World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.

Ennis, Inc. (NYSE:EBF) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of September. At the end of this article we will also compare EBF to other stocks including Global Indemnity plc (NASDAQ:GBLI), Old Line Bancshares, Inc. (MD) (NASDAQ:OLBK), and One Liberty Properties, Inc. (NYSE:OLP) to get a better sense of its popularity.

To the average investor there are numerous gauges stock traders put to use to appraise publicly traded companies. Two of the less utilized gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outpace their index-focused peers by a superb amount (see the details here).

Chuck Royce

We’re going to take a look at the new hedge fund action surrounding Ennis, Inc. (NYSE:EBF).

Hedge fund activity in Ennis, Inc. (NYSE:EBF)

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, no change from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in EBF over the last 13 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

EBF_dec2018

Among these funds, Renaissance Technologies held the most valuable stake in Ennis, Inc. (NYSE:EBF), which was worth $23.6 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $17.3 million worth of shares. Moreover, AQR Capital Management, Citadel Investment Group, and Two Sigma Advisors were also bullish on Ennis, Inc. (NYSE:EBF), allocating a large percentage of their portfolios to this stock.

Due to the fact that Ennis, Inc. (NYSE:EBF) has faced falling interest from hedge fund managers, it’s safe to say that there is a sect of fund managers that decided to sell off their entire stakes heading into Q3. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest investment of all the hedgies watched by Insider Monkey, worth about $0.9 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $0.2 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Ennis, Inc. (NYSE:EBF) but similarly valued. These stocks are Global Indemnity plc (NASDAQ:GBLI), Old Line Bancshares, Inc.  (NASDAQ:OLBK), One Liberty Properties, Inc. (NYSE:OLP), and TechTarget Inc (NASDAQ:TTGT). This group of stocks’ market values match EBF’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GBLI 7 47327 2
OLBK 7 55120 -4
OLP 6 25637 -1
TTGT 15 87997 1
Average 8.75 54020 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $53 million in EBF’s case. TechTarget Inc (NASDAQ:TTGT) is the most popular stock in this table. On the other hand One Liberty Properties, Inc. (NYSE:OLP) is the least popular one with only 6 bullish hedge fund positions. Ennis, Inc. (NYSE:EBF) 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 TTGT might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.

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