The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Equitable Holdings, Inc. (NYSE:EQH) and determine whether the smart money was really smart about this stock.
Is Equitable Holdings, Inc. (NYSE:EQH) a buy, sell, or hold? Prominent investors were in an optimistic mood. The number of long hedge fund positions went up by 12 in recent months. Equitable Holdings, Inc. (NYSE:EQH) was in 39 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 35. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EQH 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). There were 27 hedge funds in our database with EQH positions at the end of the first quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 precious metals prices. So, we are checking out this junior gold mining stock. Legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. 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. Now let’s check out the recent hedge fund action encompassing Equitable Holdings, Inc. (NYSE:EQH).
How have hedgies been trading Equitable Holdings, Inc. (NYSE:EQH)?
At second quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 44% from one quarter earlier. By comparison, 32 hedge funds held shares or bullish call options in EQH a year ago. So, let’s examine 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 $384.4 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $246.3 million position. Other investors bullish on the company included Sessa Capital, Point72 Asset Management, 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 12.01% of its 13F portfolio. Soapstone Capital is also relatively very bullish on the stock, earmarking 2.78 percent of its 13F equity portfolio to EQH.
Now, key money managers have jumped into Equitable Holdings, Inc. (NYSE:EQH) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in Equitable Holdings, Inc. (NYSE:EQH). Arrowstreet Capital had $41.7 million invested in the company at the end of the quarter. Pasco Alfaro / Richard Tumure’s Miura Global Management also initiated a $7.8 million position during the quarter. The following funds were also among the new EQH investors: David Rodriguez-Fraile’s BlueMar Capital Management, Peter Seuss’s Prana Capital Management, and Parsa Kiai’s Steamboat Capital Partners.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Equitable Holdings, Inc. (NYSE:EQH) but similarly valued. These stocks are RenaissanceRe Holdings Ltd. (NYSE:RNR), Clarivate Plc (NYSE:CCC), Charles River Laboratories International Inc. (NYSE:CRL), Natura &Co Holding S.A. (NYSE:NTCO), Brookfield Renewable Partners L.P. (NYSE:BEP), Elanco Animal Health Incorporated (NYSE:ELAN), and James Hardie Industries plc (NYSE:JHX). This group of stocks’ market caps are similar to EQH’s market cap.
|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 24.6 hedge funds with bullish positions and the average amount invested in these stocks was $509 million. That figure was $1112 million in EQH’s case. Clarivate Plc (NYSE:CCC) is the most popular stock in this table. On the other hand Natura &Co Holding S.A. (NYSE:NTCO) is the least popular one with only 5 bullish hedge fund positions. Equitable Holdings, Inc. (NYSE:EQH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EQH is 82.5. 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 33% in 2020 through the end of August and beat the market by 23.2 percentage points. Unfortunately EQH wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on EQH were disappointed as the stock returned 10.7% during the same time period 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.
Follow Equitable Holdings Inc. (NYSE:EQH)
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Disclosure: None. This article was originally published at Insider Monkey.