The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded EnLink Midstream LLC (NYSE:ENLC) based on those filings.
Is ENLC a good stock to buy now? EnLink Midstream LLC (NYSE:ENLC) was in 9 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 15. ENLC investors should pay attention to an increase in hedge fund interest of late. There were 7 hedge funds in our database with ENLC holdings at the end of June. Our calculations also showed that ENLC 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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 analyze the key hedge fund action surrounding EnLink Midstream LLC (NYSE:ENLC).
Do Hedge Funds Think ENLC Is A Good Stock To Buy Now?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ENLC over the last 21 quarters. 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, Citadel Investment Group was the largest shareholder of EnLink Midstream LLC (NYSE:ENLC), with a stake worth $2.8 million reported as of the end of September. Trailing Citadel Investment Group was Renaissance Technologies, which amassed a stake valued at $2.8 million. Arrowstreet Capital, Balyasny Asset Management, and Two Sigma 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 JS Capital allocated the biggest weight to EnLink Midstream LLC (NYSE:ENLC), around 0.02% of its 13F portfolio. Balyasny Asset Management is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to ENLC.
Consequently, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, established the most valuable position in EnLink Midstream LLC (NYSE:ENLC). Balyasny Asset Management had $1.7 million invested in the company at the end of the quarter. Jonathan Soros’s JS Capital also made a $0.3 million investment in the stock during the quarter. The only other fund with a brand new ENLC position is Noam Gottesman’s GLG Partners.
Let’s go over hedge fund activity in other stocks similar to EnLink Midstream LLC (NYSE:ENLC). We will take a look at Opera Limited (NASDAQ:OPRA), New Gold Inc. (NYSE:NGD), SilverCrest Metals Inc. (NYSE:SILV), Atrion Corporation (NASDAQ:ATRI), Mack Cali Realty Corp (NYSE:CLI), Victory Capital Holdings, Inc. (NASDAQ:VCTR), and Revolve Group, Inc. (NYSE:RVLV). This group of stocks’ market valuations resemble ENLC’s market valuation.
|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 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $13 million in ENLC’s case. Revolve Group, Inc. (NYSE:RVLV) is the most popular stock in this table. On the other hand Opera Limited (NASDAQ:OPRA) is the least popular one with only 4 bullish hedge fund positions. EnLink Midstream LLC (NYSE:ENLC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ENLC is 39.7. 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. A small number of hedge funds were also right about betting on ENLC as the stock returned 87.1% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.