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Is Enterprise Financial Services Corp (EFSC) Going to Burn These Hedge Funds?

After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Enterprise Financial Services Corp (NASDAQ:EFSC).

Enterprise Financial Services Corp (NASDAQ:EFSC) was in 13 hedge funds’ portfolios at the end of September. EFSC investors should be aware of a decrease in enthusiasm from smart money of late. There were 14 hedge funds in our database with EFSC positions at the end of the previous quarter. Our calculations also showed that efsc isn’t among the 30 most popular stocks among hedge funds.

In today’s marketplace there are dozens of methods stock traders have at their disposal to assess publicly traded companies. A pair of the most innovative methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can beat the S&P 500 by a solid margin (see the details here).

Chuck Royce

We’re going to take a glance at the fresh hedge fund action encompassing Enterprise Financial Services Corp (NASDAQ:EFSC).

How are hedge funds trading Enterprise Financial Services Corp (NASDAQ:EFSC)?

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from the second quarter of 2018. By comparison, 11 hedge funds held shares or bullish call options in EFSC heading into this year. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

No of Hedge Funds with EFSC Positions

More specifically, Renaissance Technologies was the largest shareholder of Enterprise Financial Services Corp (NASDAQ:EFSC), with a stake worth $20.9 million reported as of the end of September. Trailing Renaissance Technologies was Elizabeth Park Capital Management, which amassed a stake valued at $13.9 million. AQR Capital Management, Royce & Associates, and AlphaOne Capital Partners were also very fond of the stock, giving the stock large weights in their portfolios.

Judging by the fact that Enterprise Financial Services Corp (NASDAQ:EFSC) has witnessed falling interest from hedge fund managers, we can see that there is a sect of fund managers that decided to sell off their entire stakes in the third quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management sold off the biggest investment of the 700 funds followed by Insider Monkey, comprising close to $0.4 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund said goodbye to about $0.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Enterprise Financial Services Corp (NASDAQ:EFSC). We will take a look at Goosehead Insurance, Inc. (NASDAQ:GSHD), Installed Building Products Inc (NYSE:IBP), Instructure, Inc. (NYSE:INST), and Intellia Therapeutics, Inc. (NASDAQ:NTLA). This group of stocks’ market caps match EFSC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GSHD 4 16841 0
IBP 9 17255 4
INST 18 158865 0
NTLA 10 52186 1
Average 10.25 61287 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $76 million in EFSC’s case. Instructure, Inc. (NYSE:INST) is the most popular stock in this table. On the other hand Goosehead Insurance, Inc. (NASDAQ:GSHD) is the least popular one with only 4 bullish hedge fund positions. Enterprise Financial Services Corp (NASDAQ:EFSC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard INST might be a better candidate to consider a long position.

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

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