We can judge whether Era Group Inc (NYSE:ERA) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Era Group Inc (NYSE:ERA) was in 9 hedge funds’ portfolios at the end of March. ERA investors should be aware of an increase in enthusiasm from smart money recently. There were 7 hedge funds in our database with ERA positions at the end of the previous quarter. Our calculations also showed that ERA isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to check out the new hedge fund action surrounding Era Group Inc (NYSE:ERA).
What does smart money think about Era Group Inc (NYSE:ERA)?
At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 29% from the fourth quarter of 2018. On the other hand, there were a total of 8 hedge funds with a bullish position in ERA a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Rima Senvest Management was the largest shareholder of Era Group Inc (NYSE:ERA), with a stake worth $22.4 million reported as of the end of March. Trailing Rima Senvest Management was Royce & Associates, which amassed a stake valued at $18.2 million. D E Shaw, Arrowstreet Capital, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, key hedge funds have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most valuable position in Era Group Inc (NYSE:ERA). Arrowstreet Capital had $0.6 million invested in the company at the end of the quarter. Ronald Hua’s Qtron Investments also initiated a $0.2 million position during the quarter.
Let’s check out hedge fund activity in other stocks similar to Era Group Inc (NYSE:ERA). We will take a look at Dova Pharmaceuticals, Inc. (NASDAQ:DOVA), Sientra Inc (NASDAQ:SIEN), Tocagen Inc. (NASDAQ:TOCA), and Celyad SA (NASDAQ:CYAD). All of these stocks’ market caps match ERA’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 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $44 million in ERA’s case. Sientra Inc (NASDAQ:SIEN) is the most popular stock in this table. On the other hand Celyad SA (NASDAQ:CYAD) is the least popular one with only 1 bullish hedge fund positions. Era Group Inc (NYSE:ERA) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ERA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ERA were disappointed as the stock returned -30% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.