As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Evercore Inc. (NYSE:EVR).
Hedge fund interest in Evercore Inc. (NYSE:EVR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that EVR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The Chemours Company (NYSE:CC), Elbit Systems Ltd. (NASDAQ:ESLT), and Adaptive Biotechnologies Corporation (NASDAQ:ADPT) to gather more data points.
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to go over the recent hedge fund action surrounding Evercore Inc. (NYSE:EVR).
Do Hedge Funds Think EVR Is A Good Stock To Buy Now?
At Q2’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards EVR over the last 24 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Evercore Inc. (NYSE:EVR) was held by Millennium Management, which reported holding $51.9 million worth of stock at the end of June. It was followed by Citadel Investment Group with a $51.3 million position. Other investors bullish on the company included Nitorum Capital, Ariel Investments, and Royce & Associates. In terms of the portfolio weights assigned to each position Full18 Capital allocated the biggest weight to Evercore Inc. (NYSE:EVR), around 4.04% of its 13F portfolio. Nitorum Capital is also relatively very bullish on the stock, designating 1.93 percent of its 13F equity portfolio to EVR.
Due to the fact that Evercore Inc. (NYSE:EVR) has witnessed a decline in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedgies who sold off their entire stakes last quarter. Interestingly, Robert Pohly’s Samlyn Capital cut the largest position of all the hedgies monitored by Insider Monkey, totaling an estimated $45.9 million in stock, and Louis Bacon’s Moore Global Investments was right behind this move, as the fund said goodbye to about $23 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Evercore Inc. (NYSE:EVR) but similarly valued. We will take a look at The Chemours Company (NYSE:CC), Elbit Systems Ltd. (NASDAQ:ESLT), Adaptive Biotechnologies Corporation (NASDAQ:ADPT), Kornit Digital Ltd. (NASDAQ:KRNT), Duck Creek Technologies, Inc. (NASDAQ:DCT), nCino, Inc. (NASDAQ:NCNO), and Vroom, Inc. (NASDAQ:VRM). This group of stocks’ market caps are similar to EVR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CC | 24 | 562111 | -3 |
| ESLT | 4 | 48909 | 1 |
| ADPT | 27 | 2217269 | -2 |
| KRNT | 21 | 205384 | -3 |
| DCT | 18 | 255841 | -1 |
| NCNO | 25 | 412906 | 4 |
| VRM | 21 | 180671 | 0 |
| Average | 20 | 554727 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $555 million. That figure was $343 million in EVR’s case. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is the most popular stock in this table. On the other hand Elbit Systems Ltd. (NASDAQ:ESLT) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Evercore Inc. (NYSE:EVR) is more popular among hedge funds. Our overall hedge fund sentiment score for EVR is 83.2. 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 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 returned 24.9% in 2021 through October 15th but still managed to beat the market by 4.5 percentage points. Hedge funds were also right about betting on EVR as the stock returned 10.3% since the end of June (through 10/15) 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.
Follow Evercore Inc. (NYSE:EVR)
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Disclosure: None. This article was originally published at Insider Monkey.
