Hedge Funds Are Dumping Entegris Inc (ENTG)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Entegris Inc (NASDAQ:ENTG) based on those filings.

Entegris Inc (NASDAQ:ENTG) was in 23 hedge funds’ portfolios at the end of March. The all time high for this statistic is 30. ENTG shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 30 hedge funds in our database with ENTG positions at the end of the fourth quarter. Our calculations also showed that ENTG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

If you’d ask most shareholders, hedge funds are viewed as worthless, outdated financial vehicles of years past. While there are more than 8000 funds trading at present, We look at the masters of this club, around 850 funds. These hedge fund managers oversee most of the smart money’s total capital, and by paying attention to their finest stock picks, Insider Monkey has figured out a few investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .


Louis Navellier of Navellier & Associates

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the new hedge fund action surrounding Entegris Inc (NASDAQ:ENTG).

Do Hedge Funds Think ENTG Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -23% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ENTG over the last 23 quarters. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Select Equity Group, managed by Robert Joseph Caruso, holds the number one position in Entegris Inc (NASDAQ:ENTG). Select Equity Group has a $746.8 million position in the stock, comprising 2.7% of its 13F portfolio. The second most bullish fund manager is Cantillon Capital Management, managed by William von Mueffling, which holds a $250.1 million position; 1.8% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism contain Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, Robert G. Moses’s RGM Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position RGM Capital allocated the biggest weight to Entegris Inc (NASDAQ:ENTG), around 4.34% of its 13F portfolio. Palestra Capital Management is also relatively very bullish on the stock, setting aside 3.27 percent of its 13F equity portfolio to ENTG.

Judging by the fact that Entegris Inc (NASDAQ:ENTG) has witnessed falling interest from hedge fund managers, logic holds that there is a sect of hedgies who were dropping their full holdings heading into Q2. Interestingly, David Cohen and Harold Levy’s Iridian Asset Management said goodbye to the largest position of all the hedgies watched by Insider Monkey, worth about $58.8 million in stock. Jeffrey Gates’s fund, Gates Capital Management, also said goodbye to its stock, about $41.5 million worth. These moves are interesting, as total hedge fund interest dropped by 7 funds heading into Q2.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Entegris Inc (NASDAQ:ENTG) but similarly valued. We will take a look at Eastman Chemical Company (NYSE:EMN), Franklin Resources, Inc. (NYSE:BEN), Westinghouse Air Brake Technologies Corporation (NYSE:WAB), China Southern Airlines Co Ltd (NYSE:ZNH), Solaredge Technologies Inc (NASDAQ:SEDG), Bio-Techne Corporation (NASDAQ:TECH), and Liberty Global plc (NASDAQ:LBTYA). This group of stocks’ market valuations resemble ENTG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EMN 27 162100 -4
BEN 31 198221 -2
WAB 40 2481343 -5
ZNH 3 15588 0
SEDG 32 420741 4
TECH 23 411800 -1
LBTYA 35 848078 -1
Average 27.3 648267 -1.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $648 million. That figure was $1485 million in ENTG’s case. Westinghouse Air Brake Technologies Corporation (NYSE:WAB) is the most popular stock in this table. On the other hand China Southern Airlines Co Ltd (NYSE:ZNH) is the least popular one with only 3 bullish hedge fund positions. Entegris Inc (NASDAQ:ENTG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ENTG is 48. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately ENTG wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ENTG investors were disappointed as the stock returned 0.5% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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