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 second 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 5 years and analyze what the smart money thinks of Juniper Industrial Holdings, Inc. (NYSE:JIH) based on that data and determine whether they were really smart about the stock.
Juniper Industrial Holdings, Inc. (NYSE:JIH) has seen an increase in hedge fund interest of late. Juniper Industrial Holdings, Inc. (NYSE:JIH) was in 18 hedge funds’ portfolios at the end of June. The all time high for this statistics is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that JIH isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Keeping this in mind let’s view the key hedge fund action encompassing Juniper Industrial Holdings, Inc. (NYSE:JIH).
What does smart money think about Juniper Industrial Holdings, Inc. (NYSE:JIH)?
At the end of the second quarter, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in JIH a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Magnetar Capital held the most valuable stake in Juniper Industrial Holdings, Inc. (NYSE:JIH), which was worth $17.5 million at the end of the third quarter. On the second spot was Glazer Capital which amassed $16.2 million worth of shares. BlueCrest Capital Mgmt., Scopus Asset Management, and Millennium Management 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 Cobalt Capital Management allocated the biggest weight to Juniper Industrial Holdings, Inc. (NYSE:JIH), around 2.95% of its 13F portfolio. Glazer Capital is also relatively very bullish on the stock, designating 1.15 percent of its 13F equity portfolio to JIH.
Now, key hedge funds were breaking ground themselves. BlueCrest Capital Mgmt., managed by Michael Platt and William Reeves, initiated the biggest position in Juniper Industrial Holdings, Inc. (NYSE:JIH). BlueCrest Capital Mgmt. had $3 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also initiated a $2.4 million position during the quarter. The other funds with brand new JIH positions are Andrew Weiss’s Weiss Asset Management, Steve Zheng’s Deepcurrents Investment Group, and Greg Poole’s Echo Street Capital Management.
Let’s now review hedge fund activity in other stocks similar to Juniper Industrial Holdings, Inc. (NYSE:JIH). We will take a look at Napco Security Technologies Inc (NASDAQ:NSSC), REX American Resources Corp (NYSE:REX), Unity Biotechnology, Inc. (NASDAQ:UBX), Peoples Bancorp Inc. (NASDAQ:PEBO), Kimball International Inc (NASDAQ:KBAL), BioLife Solutions, Inc. (NASDAQ:BLFS), and SM Energy Company (NYSE:SM). This group of stocks’ market values are closest to JIH’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 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $119 million in JIH’s case. SM Energy Company (NYSE:SM) is the most popular stock in this table. On the other hand Unity Biotechnology, Inc. (NASDAQ:UBX) is the least popular one with only 7 bullish hedge fund positions. Juniper Industrial Holdings, Inc. (NYSE:JIH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JIH is 86. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately JIH wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on JIH were disappointed as the stock returned 4.9% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.