We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Haverty Furniture Companies, Inc. (NYSE:HVT).
Is HVT a good stock to buy now? Investors who are in the know were in a bullish mood. The number of bullish hedge fund bets moved up by 3 recently. Haverty Furniture Companies, Inc. (NYSE:HVT) was in 14 hedge funds’ portfolios at the end of September. The all time high for this statistic is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HVT 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). There were 11 hedge funds in our database with HVT positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most shareholders, hedge funds are viewed as underperforming, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation today, Our researchers look at the leaders of this group, about 850 funds. These investment experts handle bulk of the hedge fund industry’s total asset base, and by shadowing their unrivaled investments, Insider Monkey has formulated numerous investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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. Keeping this in mind we’re going to take a glance at the key hedge fund action regarding Haverty Furniture Companies, Inc. (NYSE:HVT).
Do Hedge Funds Think HVT Is A Good Stock To Buy Now?
At the end of September, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HVT over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Haverty Furniture Companies, Inc. (NYSE:HVT), which was worth $26.6 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $7.3 million worth of shares. Millennium Management, GMT Capital, and Marshall Wace LLP 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 GMT Capital allocated the biggest weight to Haverty Furniture Companies, Inc. (NYSE:HVT), around 0.39% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to HVT.
Consequently, specific money managers have jumped into Haverty Furniture Companies, Inc. (NYSE:HVT) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most valuable position in Haverty Furniture Companies, Inc. (NYSE:HVT). Marshall Wace LLP had $1.5 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $1.1 million position during the quarter. The following funds were also among the new HVT investors: Donald Sussman’s Paloma Partners and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).
Let’s also examine hedge fund activity in other stocks similar to Haverty Furniture Companies, Inc. (NYSE:HVT). These stocks are Bank of Marin Bancorp (NASDAQ:BMRC), HCI Group Inc (NYSE:HCI), Kaleido BioSciences, Inc. (NASDAQ:KLDO), Newtek Business Services Corp (NASDAQ:NEWT), Hingham Institution for Savings (NASDAQ:HIFS), Grid Dynamics Holdings, Inc. (NASDAQ:GDYN), and Marinus Pharmaceuticals Inc (NASDAQ:MRNS). This group of stocks’ market values are closest to HVT’s market value.
|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 7.1 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $52 million in HVT’s case. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is the most popular stock in this table. On the other hand Hingham Institution for Savings (NASDAQ:HIFS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Haverty Furniture Companies, Inc. (NYSE:HVT) is more popular among hedge funds. Our overall hedge fund sentiment score for HVT is 88. 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 returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on HVT as the stock returned 31.9% since the end of September (through 12/8) 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.
Disclosure: None. This article was originally published at Insider Monkey.