The first quarter was a breeze as Powell pivoted, and China seemed eager to reach a deal with Trump. Both the S&P 500 and Russell 2000 delivered very strong gains as a result, with the Russell 2000, which is composed of smaller companies, outperforming the large-cap stocks slightly during the first quarter. Unfortunately sentiment shifted in May and August as this time China pivoted and Trump put more pressure on China by increasing tariffs. Fourth quarter brought optimism to the markets and hedge funds’ top 20 stock picks performed spectacularly in this volatile environment. These stocks delivered a total gain of 37.4% through the end of November, vs. a gain of 27.5% for the S&P 500 ETF. In this article we will look at how this market volatility affected the sentiment of hedge funds towards Standex Int’l Corp. (NYSE:SXI), and what that likely means for the prospects of the company and its stock.
Standex Int’l Corp. (NYSE:SXI) has experienced an increase in hedge fund interest in recent months. Our calculations also showed that SXI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most traders, hedge funds are assumed to be unimportant, old financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, Our researchers hone in on the elite of this club, about 750 funds. Most estimates calculate that this group of people watch over bulk of all hedge funds’ total capital, and by keeping an eye on their first-class stock picks, Insider Monkey has revealed numerous investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 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. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to view the new hedge fund action surrounding Standex Int’l Corp. (NYSE:SXI).
What have hedge funds been doing with Standex Int’l Corp. (NYSE:SXI)?
At Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 78% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SXI over the last 17 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
More specifically, Cove Street Capital was the largest shareholder of Standex Int’l Corp. (NYSE:SXI), with a stake worth $12 million reported as of the end of September. Trailing Cove Street Capital was Millennium Management, which amassed a stake valued at $7.5 million. GAMCO Investors, Marshall Wace, and Two Sigma Advisors 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 Cove Street Capital allocated the biggest weight to Standex Int’l Corp. (NYSE:SXI), around 1.67% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, earmarking 0.17 percent of its 13F equity portfolio to SXI.
Now, specific money managers have jumped into Standex Int’l Corp. (NYSE:SXI) headfirst. Marshall Wace, managed by Paul Marshall and Ian Wace, assembled the largest position in Standex Int’l Corp. (NYSE:SXI). Marshall Wace had $3.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $1.8 million investment in the stock during the quarter. The other funds with new positions in the stock are David E. Shaw’s D E Shaw, Minhua Zhang’s Weld Capital Management, and David E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Standex Int’l Corp. (NYSE:SXI) but similarly valued. These stocks are Sunnova Energy International Inc. (NYSE:NOVA), CNX Midstream Partners LP (NYSE:CNXM), BrightSphere Investment Group plc (NYSE:BSIG), and Corindus Vascular Robotics Inc (NYSEMKT:CVRS). This group of stocks’ market values are closest to SXI’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 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $160 million. That figure was $44 million in SXI’s case. BrightSphere Investment Group plc (NYSE:BSIG) is the most popular stock in this table. On the other hand CNX Midstream Partners LP (NYSE:CNXM) is the least popular one with only 6 bullish hedge fund positions. Standex Int’l Corp. (NYSE:SXI) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on SXI, though not to the same extent, as the stock returned 6.1% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.