Entegris Inc (ENTG): Hedge Funds Are Snapping Up

We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Entegris Inc (NASDAQ:ENTG).

Entegris Inc (NASDAQ:ENTG) investors should be aware of an increase in enthusiasm from smart money of late. ENTG was in 26 hedge funds’ portfolios at the end of the third quarter of 2019. There were 24 hedge funds in our database with ENTG positions at the end of the previous quarter. Our calculations also showed that ENTG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are a lot of indicators market participants use to appraise their holdings. A duo of the best indicators are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the broader indices by a very impressive margin (see the details here).

William Von Mueffling - Cantillon Capital Management

William Von Mueffling of Cantillon Capital Management

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s view the recent hedge fund action encompassing Entegris Inc (NASDAQ:ENTG).

What does smart money think about Entegris Inc (NASDAQ:ENTG)?

At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ENTG over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with ENTG Positions

More specifically, GMT Capital was the largest shareholder of Entegris Inc (NASDAQ:ENTG), with a stake worth $300.2 million reported as of the end of September. Trailing GMT Capital was Iridian Asset Management, which amassed a stake valued at $153.5 million. Cantillon Capital Management, RGM Capital, and Polar Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position GMT Capital allocated the biggest weight to Entegris Inc (NASDAQ:ENTG), around 11.08% of its portfolio. RGM Capital is also relatively very bullish on the stock, designating 5.02 percent of its 13F equity portfolio to ENTG.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Cantillon Capital Management, managed by William von Mueffling, initiated the biggest position in Entegris Inc (NASDAQ:ENTG). Cantillon Capital Management had $100.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $34.4 million position during the quarter. The other funds with brand new ENTG positions are John Overdeck and David Siegel’s Two Sigma Advisors, Frank Slattery’s Symmetry Peak Management, and Andrew Sandler’s Sandler Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Entegris Inc (NASDAQ:ENTG) but similarly valued. These stocks are Pentair plc (NYSE:PNR), Buckeye Partners, L.P. (NYSE:BPL), Elastic N.V. (NYSE:ESTC), and Genesee & Wyoming Inc (NYSE:GWR). This group of stocks’ market values match ENTG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PNR 22 415842 1
BPL 18 536490 5
ESTC 30 867426 3
GWR 31 783531 5
Average 25.25 650822 3.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.25 hedge funds with bullish positions and the average amount invested in these stocks was $651 million. That figure was $807 million in ENTG’s case. Genesee & Wyoming Inc (NYSE:GWR) is the most popular stock in this table. On the other hand Buckeye Partners, L.P. (NYSE:BPL) is the least popular one with only 18 bullish hedge fund positions. Entegris Inc (NASDAQ:ENTG) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately ENTG wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ENTG were disappointed as the stock returned 0.7% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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