There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Ennis, Inc. (NYSE:EBF).
Ennis, Inc. (NYSE:EBF) was in 12 hedge funds’ portfolios at the end of December. EBF shareholders have witnessed an increase in enthusiasm from smart money recently. There were 11 hedge funds in our database with EBF positions at the end of the previous quarter. Our calculations also showed that ebf 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.
We’re going to take a peek at the fresh hedge fund action surrounding Ennis, Inc. (NYSE:EBF).
What does the smart money think about Ennis, Inc. (NYSE:EBF)?
At the end of the fourth quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in EBF a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Ennis, Inc. (NYSE:EBF), with a stake worth $26.2 million reported as of the end of December. Trailing Renaissance Technologies was Royce & Associates, which amassed a stake valued at $26.1 million. AQR Capital Management, Citadel Investment Group, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key hedge funds have jumped into Ennis, Inc. (NYSE:EBF) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the largest position in Ennis, Inc. (NYSE:EBF). Marshall Wace LLP had $0.6 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $0.3 million position during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Ennis, Inc. (NYSE:EBF). We will take a look at OrthoPediatrics Corp. (NASDAQ:KIDS), Eidos Therapeutics, Inc. (NASDAQ:EIDX), Avianca Holdings SA (NYSE:AVH), and AquaVenture Holdings Limited (NYSE:WAAS). All of these stocks’ market caps resemble EBF’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 7 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $65 million in EBF’s case. AquaVenture Holdings Limited (NYSE:WAAS) is the most popular stock in this table. On the other hand Avianca Holdings SA (NYSE:AVH) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Ennis, Inc. (NYSE:EBF) is more popular among hedge funds. 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. Unfortunately EBF wasn’t nearly as popular as these 15 stock and hedge funds that were betting on EBF were disappointed as the stock returned 6% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.