Is ASH A Good Stock To Buy Now?

We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Ashland Global Holdings Inc.. (NYSE:ASH) based on that data.

Is ASH a good stock to buy now? The best stock pickers were getting more optimistic. The number of bullish hedge fund bets advanced by 14 recently. Ashland Global Holdings Inc.. (NYSE:ASH) was in 46 hedge funds’ portfolios at the end of September. The all time high for this statistic is 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ASH isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.

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 66 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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ric Dillon Diamond Hill Capital

Ric Dillon of Diamond Hill Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this cannabis tech stock right now. We go through lists like the 15 best blue chip stocks to buy 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s check out the key hedge fund action encompassing Ashland Global Holdings Inc.. (NYSE:ASH).

Do Hedge Funds Think ASH Is A Good Stock To Buy Now?

At third quarter’s end, a total of 46 of the hedge funds tracked by Insider Monkey were long this stock, a change of 44% from the previous quarter. On the other hand, there were a total of 33 hedge funds with a bullish position in ASH 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.

Is ASH A Good Stock To Buy?

The largest stake in Ashland Global Holdings Inc.. (NYSE:ASH) was held by Eminence Capital, which reported holding $399.6 million worth of stock at the end of September. It was followed by Diamond Hill Capital with a $115.1 million position. Other investors bullish on the company included Empyrean Capital Partners, Cruiser Capital Advisors, and Omega Advisors. In terms of the portfolio weights assigned to each position Cruiser Capital Advisors allocated the biggest weight to Ashland Global Holdings Inc.. (NYSE:ASH), around 59.68% of its 13F portfolio. Omega Advisors is also relatively very bullish on the stock, designating 5.59 percent of its 13F equity portfolio to ASH.

As aggregate interest increased, specific money managers have jumped into Ashland Global Holdings Inc.. (NYSE:ASH) headfirst. Iridian Asset Management, managed by David Cohen and Harold Levy, initiated the most valuable position in Ashland Global Holdings Inc.. (NYSE:ASH). Iridian Asset Management had $48.4 million invested in the company at the end of the quarter. Renaissance Technologies also made a $11.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Brian Sheehy’s Iszo Capital, Paul Tudor Jones’s Tudor Investment Corp, and Nehal Chopra’s Ratan Capital Group.

Let’s check out hedge fund activity in other stocks similar to Ashland Global Holdings Inc.. (NYSE:ASH). We will take a look at China Biologic Products Holdings Inc (NASDAQ:CBPO), Silicon Laboratories (NASDAQ:SLAB), Sinopec Shanghai Petrochemical Co. (NYSE:SHI), Agora, Inc. (NASDAQ:API), Manpowergroup Inc (NYSE:MAN), Cousins Properties Incorporated (NYSE:CUZ), and PVH Corp (NYSE:PVH). This group of stocks’ market valuations resemble ASH’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CBPO 18 848680 -5
SLAB 26 99748 -2
SHI 3 10098 0
API 24 116132 -5
MAN 34 408974 0
CUZ 13 83776 -6
PVH 28 713571 0
Average 20.9 325854 -2.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $326 million. That figure was $1105 million in ASH’s case. Manpowergroup Inc (NYSE:MAN) is the most popular stock in this table. On the other hand Sinopec Shanghai Petrochemical Co. (NYSE:SHI) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Ashland Global Holdings Inc.. (NYSE:ASH) is more popular among hedge funds. Our overall hedge fund sentiment score for ASH is 90. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Unfortunately ASH wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ASH were disappointed as the stock returned 5% since the end of the third quarter (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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