Is ASH Stock A Buy or Sell?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Ashland Global Holdings Inc.. (NYSE:ASH) in this article.

Is ASH stock a buy or sell? Ashland Global Holdings Inc.. (NYSE:ASH) investors should pay attention to a decrease in support from the world’s most elite money managers recently. Ashland Global Holdings Inc.. (NYSE:ASH) was in 38 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 46. Our calculations also showed that ASH isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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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 under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 take a glance at the recent hedge fund action surrounding Ashland Global Holdings Inc.. (NYSE:ASH).

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

At fourth quarter’s end, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. By comparison, 30 hedge funds held shares or bullish call options in ASH a year ago. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

More specifically, Eminence Capital was the largest shareholder of Ashland Global Holdings Inc.. (NYSE:ASH), with a stake worth $319.6 million reported as of the end of December. Trailing Eminence Capital was Diamond Hill Capital, which amassed a stake valued at $123.4 million. Millennium Management, Empyrean Capital Partners, and Omega 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 Cruiser Capital Advisors allocated the biggest weight to Ashland Global Holdings Inc.. (NYSE:ASH), around 44.94% of its 13F portfolio. Albar Capital is also relatively very bullish on the stock, earmarking 8.94 percent of its 13F equity portfolio to ASH.

Because Ashland Global Holdings Inc.. (NYSE:ASH) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers that decided to sell off their positions entirely last quarter. Interestingly, Brian Sheehy’s Iszo Capital cut the largest stake of the 750 funds watched by Insider Monkey, totaling an estimated $10.9 million in stock, and Paul Tudor Jones’s Tudor Investment Corp was right behind this move, as the fund cut about $3.1 million worth. These transactions are interesting, as total hedge fund interest was cut by 8 funds last quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Ashland Global Holdings Inc.. (NYSE:ASH) but similarly valued. We will take a look at Flowserve Corporation (NYSE:FLS), Flowers Foods, Inc. (NYSE:FLO), Boyd Gaming Corporation (NYSE:BYD), Synovus Financial Corp. (NYSE:SNV), Pilgrim’s Pride Corporation (NASDAQ:PPC), Penske Automotive Group, Inc. (NYSE:PAG), and Builders FirstSource, Inc. (NASDAQ:BLDR). This group of stocks’ market values match ASH’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FLS 21 148236 2
FLO 27 289063 -3
BYD 28 275982 0
SNV 33 157470 8
PPC 17 80484 -1
PAG 21 114199 3
BLDR 37 755250 -1
Average 26.3 260098 1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $260 million. That figure was $1114 million in ASH’s case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand Pilgrim’s Pride Corporation (NASDAQ:PPC) is the least popular one with only 17 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 71.8. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on ASH as the stock returned 11.9% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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