Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Emcor Group Inc (NYSE:EME) changed recently.
Is EME a good stock to buy? Emcor Group Inc (NYSE:EME) was in 20 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 29. EME investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 25 hedge funds in our database with EME holdings at the end of December. Our calculations also showed that EME isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Do Hedge Funds Think EME Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EME over the last 23 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in Emcor Group Inc (NYSE:EME) was held by Stadium Capital Management, which reported holding $40.3 million worth of stock at the end of December. It was followed by AQR Capital Management with a $39.2 million position. Other investors bullish on the company included Value Holdings LP, Millennium Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Stadium Capital Management allocated the biggest weight to Emcor Group Inc (NYSE:EME), around 18.81% of its 13F portfolio. Value Holdings LP is also relatively very bullish on the stock, setting aside 4.58 percent of its 13F equity portfolio to EME.
Due to the fact that Emcor Group Inc (NYSE:EME) has faced falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of funds that slashed their positions entirely last quarter. At the top of the heap, Richard S. Meisenberg’s ACK Asset Management said goodbye to the largest position of all the hedgies watched by Insider Monkey, worth about $14.5 million in stock. Brandon Haley’s fund, Holocene Advisors, also dropped its stock, about $3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Emcor Group Inc (NYSE:EME) but similarly valued. We will take a look at MP Materials Corp. (NYSE:MP), Lattice Semiconductor Corporation (NASDAQ:LSCC), Coursera, Inc. (NYSE:COUR), Cimarex Energy Co (NYSE:XEC), Allakos Inc. (NASDAQ:ALLK), Nexstar Media Group, Inc. (NASDAQ:NXST), and loanDepot, Inc. (NYSE:LDI). All of these stocks’ market caps are similar to EME’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 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $744 million. That figure was $167 million in EME’s case. Cimarex Energy Co (NYSE:XEC) is the most popular stock in this table. On the other hand loanDepot, Inc. (NYSE:LDI) is the least popular one with only 6 bullish hedge fund positions. Emcor Group Inc (NYSE:EME) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EME is 41.9. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately EME wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); EME investors were disappointed as the stock returned 6.8% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Emcor Group Inc. (NYSE:EME)
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Disclosure: None. This article was originally published at Insider Monkey.