Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Here is What Hedge Funds Think About Sensient Technologies Corporation (SXT)

World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.

Sensient Technologies Corporation (NYSE:SXT) was in 15 hedge funds’ portfolios at the end of December. SXT has seen an increase in enthusiasm from smart money of late. There were 11 hedge funds in our database with SXT positions at the end of the previous quarter. Our calculations also showed that SXT isn’t among the 30 most popular stocks among hedge funds.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

YORK CAPITAL MANAGEMENT

We’re going to take a gander at the latest hedge fund action encompassing Sensient Technologies Corporation (NYSE:SXT).

What have hedge funds been doing with Sensient Technologies Corporation (NYSE:SXT)?

Heading into the first quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 36% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in SXT a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

SXT_apr2019

The largest stake in Sensient Technologies Corporation (NYSE:SXT) was held by GAMCO Investors, which reported holding $34.2 million worth of stock at the end of September. It was followed by York Capital Management with a $24.1 million position. Other investors bullish on the company included Echo Street Capital Management, Citadel Investment Group, and D E Shaw.

Now, specific money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most valuable position in Sensient Technologies Corporation (NYSE:SXT). Arrowstreet Capital had $0.8 million invested in the company at the end of the quarter. Bruce Kovner’s Caxton Associates LP also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new SXT investors: Stephen Loukas, David A. Lorber, Zachary George’s FrontFour Capital Group and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s go over hedge fund activity in other stocks similar to Sensient Technologies Corporation (NYSE:SXT). These stocks are HMS Holdings Corp. (NASDAQ:HMSY), Transportadora de Gas del Sur SA (NYSE:TGS), AmeriGas Partners, L.P. (NYSE:APU), and TC Pipelines, LP (NYSE:TCP). This group of stocks’ market caps are similar to SXT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HMSY 22 134551 6
TGS 8 42096 -1
APU 4 18074 -2
TCP 2 4806 -2
Average 9 49882 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $85 million in SXT’s case. HMS Holdings Corp. (NASDAQ:HMSY) is the most popular stock in this table. On the other hand TC Pipelines, LP (NYSE:TCP) is the least popular one with only 2 bullish hedge fund positions. Sensient Technologies Corporation (NYSE:SXT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on SXT, though not to the same extent, as the stock returned 23.7% and outperformed the market as well.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...