It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Evercore Partners Inc. (NYSE:EVR).
Is Evercore Partners Inc. (NYSE:EVR) a healthy stock for your portfolio? The stock hasn’t gone anywhere over the last 2 years and was trading below $50 at the end of September. We were wondering whether the smart money saw this as a buying opportunity. Unfortunately our calculations show that the smart money is selling. The number of long hedge fund bets went down by 3 recently. EVR was in 19 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with EVR positions at the end of the previous quarter. 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 COMSCORE, Inc. (NASDAQ:SCOR), Boyd Gaming Corporation (NYSE:BYD), and National General Holdings Corp (NASDAQ:NGHC) to gather more data points.
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How are hedge funds trading Evercore Partners Inc. (NYSE:EVR)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Millennium Management, managed by Israel Englander, holds the most valuable position in Evercore Partners Inc. (NYSE:EVR). Millennium Management has a $29.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, managed by Jim Simons, which holds a $23.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism encompass Matthew A. Weatherbie’s Weatherbie Capital, Lee Munder’s Lee Munder Capital Group and Curtis Macnguyen’s Ivory Capital (Investment Mgmt).
Seeing as Evercore Partners Inc. (NYSE:EVR) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of fund managers who were dropping their entire stakes by the end of the third quarter. Interestingly, Andrew Sandler’s Sandler Capital Management said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling about $6.3 million in stock, and Richard Schimel’s Sterling Ridge Capital Management was right behind this move, as the fund cut about $3.8 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Evercore Partners Inc. (NYSE:EVR) but similarly valued. These stocks are COMSCORE, Inc. (NASDAQ:SCOR), Boyd Gaming Corporation (NYSE:BYD), National General Holdings Corp (NASDAQ:NGHC), and New Relic Inc (NYSE:NEWR). 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 |
|---|---|---|---|
| SCOR | 30 | 178273 | 9 |
| BYD | 27 | 469838 | -2 |
| NGHC | 19 | 237109 | 3 |
| NEWR | 17 | 238661 | 3 |
As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $281 million. That figure was $113 million in EVR’s case. COMSCORE, Inc. (NASDAQ:SCOR) is the most popular stock in this table. On the other hand New Relic Inc (NYSE:NEWR) is the least popular one with only 17 bullish hedge fund positions. Evercore Partners Inc. (NYSE:EVR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SCOR might be a better candidate to consider a long position.
