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Hedge Funds Are Selling Equitable Holdings, Inc. (EQH)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Equitable Holdings, Inc. (NYSE:EQH) based on that data.

Equitable Holdings, Inc. (NYSE:EQH) was in 27 hedge funds’ portfolios at the end of March. EQH shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 33 hedge funds in our database with EQH positions at the end of the previous quarter. Our calculations also showed that EQH 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 shareholders, hedge funds are viewed as underperforming, old investment vehicles of yesteryear. While there are greater than 8000 funds trading today, Our experts hone in on the aristocrats of this group, around 850 funds. These hedge fund managers administer the lion’s share of the smart money’s total capital, and by monitoring their first-class picks, Insider Monkey has formulated many investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually 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 .

John Petry Sessa Capital

John Petry of Sessa Capital

We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. Now let’s analyze the recent hedge fund action encompassing Equitable Holdings, Inc. (NYSE:EQH).

How have hedgies been trading Equitable Holdings, Inc. (NYSE:EQH)?

At Q1’s end, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in EQH over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Equitable Holdings, Inc. (NYSE:EQH) was held by Pzena Investment Management, which reported holding $319.3 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $169.3 million position. Other investors bullish on the company included Point72 Asset Management, Sessa Capital, and AQR Capital Management. In terms of the portfolio weights assigned to each position Sessa Capital allocated the biggest weight to Equitable Holdings, Inc. (NYSE:EQH), around 10.97% of its 13F portfolio. Capital Returns Management is also relatively very bullish on the stock, designating 9.97 percent of its 13F equity portfolio to EQH.

Because Equitable Holdings, Inc. (NYSE:EQH) has experienced a decline in interest from the smart money, it’s easy to see that there is a sect of hedgies that elected to cut their entire stakes last quarter. Intriguingly, Andreas Halvorsen’s Viking Global cut the largest investment of all the hedgies followed by Insider Monkey, totaling close to $224.2 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund sold off about $27.6 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 6 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Equitable Holdings, Inc. (NYSE:EQH) but similarly valued. We will take a look at Dynatrace, Inc. (NYSE:DT), Dr. Reddy’s Laboratories Limited (NYSE:RDY), Darden Restaurants, Inc. (NYSE:DRI), and RenaissanceRe Holdings Ltd. (NYSE:RNR). This group of stocks’ market valuations match EQH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DT 35 725860 10
RDY 11 112891 -1
DRI 52 879489 19
RNR 30 675791 7
Average 32 598508 8.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $599 million. That figure was $822 million in EQH’s case. Darden Restaurants, Inc. (NYSE:DRI) is the most popular stock in this table. On the other hand Dr. Reddy’s Laboratories Limited (NYSE:RDY) is the least popular one with only 11 bullish hedge fund positions. Equitable Holdings, Inc. (NYSE:EQH) is not the least popular stock in this group but hedge fund interest is still below average. 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 gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on EQH as the stock returned 33.4% during the second quarter and outperformed the market by an even larger margin.

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