In this article we will take a look at whether hedge funds think JELD-WEN Holding, Inc. (NYSE:JELD) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
JELD-WEN Holding, Inc. (NYSE:JELD) investors should pay attention to a decrease in enthusiasm from smart money in recent months. Our calculations also showed that JELD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most traders, hedge funds are perceived as worthless, outdated financial vehicles of years past. While there are greater than 8000 funds with their doors open today, Our researchers choose to focus on the elite of this group, around 850 funds. These hedge fund managers direct the majority of all hedge funds’ total asset base, and by keeping track of their unrivaled picks, Insider Monkey has unsheathed several investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s go over the recent hedge fund action encompassing JELD-WEN Holding, Inc. (NYSE:JELD).
How have hedgies been trading JELD-WEN Holding, Inc. (NYSE:JELD)?
At the end of the first quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in JELD over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in JELD-WEN Holding, Inc. (NYSE:JELD) was held by Pzena Investment Management, which reported holding $87.2 million worth of stock at the end of September. It was followed by Hound Partners with a $13 million position. Other investors bullish on the company included Arrowstreet Capital, BeaconLight Capital, and Renaissance Technologies. In terms of the portfolio weights assigned to each position BeaconLight Capital allocated the biggest weight to JELD-WEN Holding, Inc. (NYSE:JELD), around 2.43% of its 13F portfolio. Hound Partners is also relatively very bullish on the stock, dishing out 1.21 percent of its 13F equity portfolio to JELD.
Judging by the fact that JELD-WEN Holding, Inc. (NYSE:JELD) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there was a specific group of funds who were dropping their entire stakes heading into Q4. It’s worth mentioning that Ken Grossman and Glen Schneider’s SG Capital Management sold off the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth close to $16.1 million in stock. Israel Englander’s fund, Millennium Management, also dropped its stock, about $10.4 million worth. These moves are important to note, as total hedge fund interest was cut by 9 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as JELD-WEN Holding, Inc. (NYSE:JELD) but similarly valued. We will take a look at Methode Electronics Inc. (NYSE:MEI), Meritor Inc (NYSE:MTOR), CSW Industrials, Inc. (NASDAQ:CSWI), and Kronos Worldwide, Inc. (NYSE:KRO). This group of stocks’ market values are similar to JELD’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $144 million in JELD’s case. Meritor Inc (NYSE:MTOR) is the most popular stock in this table. On the other hand Methode Electronics Inc. (NYSE:MEI) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks JELD-WEN Holding, Inc. (NYSE:JELD) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on JELD as the stock returned 68.2% so far in Q2 (through June 17th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.