In this article we will check out the progression of hedge fund sentiment towards J. Jill, Inc. (NYSE:JILL) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
J. Jill, Inc. (NYSE:JILL) investors should be aware of a decrease in enthusiasm from smart money lately. Our calculations also showed that JILL 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.
To most stock holders, hedge funds are seen as underperforming, outdated financial vehicles of the past. While there are more than 8000 funds trading at present, Our experts hone in on the crème de la crème of this club, approximately 850 funds. Most estimates calculate that this group of people administer bulk of the hedge fund industry’s total capital, and by keeping an eye on their matchless investments, Insider Monkey has found numerous investment strategies that have historically outperformed the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum 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 .
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 go over the key hedge fund action regarding J. Jill, Inc. (NYSE:JILL).
How have hedgies been trading J. Jill, Inc. (NYSE:JILL)?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards JILL over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the most valuable position in J. Jill, Inc. (NYSE:JILL). Renaissance Technologies has a $0.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Winton Capital Management, managed by David Harding, which holds a $0.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions include John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to J. Jill, Inc. (NYSE:JILL), around 0.0019% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0004 percent of its 13F equity portfolio to JILL.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Arrowstreet Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified JILL as a viable investment and initiated a position in the stock.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as J. Jill, Inc. (NYSE:JILL) but similarly valued. These stocks are Willamette Valley Vineyards, Inc. (NASDAQ:WVVI), Eyegate Pharmaceuticals, Inc. (NASDAQ:EYEG), Miragen Therapeutics (NASDAQ:MGEN), and FTS International, Inc. (NYSE:FTSI). This group of stocks’ market valuations match JILL’s market valuation.
|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 4 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $1 million in JILL’s case. FTS International, Inc. (NYSE:FTSI) is the most popular stock in this table. On the other hand Willamette Valley Vineyards, Inc. (NASDAQ:WVVI) is the least popular one with only 1 bullish hedge fund positions. J. Jill, Inc. (NYSE:JILL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately JILL wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); JILL investors were disappointed as the stock returned 11.1% during the second quarter 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.