The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Sasol Limited (NYSE:SSL).
Is Sasol Limited (NYSE:SSL) a good stock to buy right now? Money managers were selling. The number of long hedge fund bets were trimmed by 5 recently. Sasol Limited (NYSE:SSL) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 11. Our calculations also showed that SSL 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 10 hedge funds in our database with SSL holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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Richard S. Pzena of Pzena Investment Management
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. With all of this in mind let’s take a gander at the recent hedge fund action regarding Sasol Limited (NYSE:SSL).
How have hedgies been trading Sasol Limited (NYSE:SSL)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SSL over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Sasol Limited (NYSE:SSL) was held by Arrowstreet Capital, which reported holding $29.2 million worth of stock at the end of September. It was followed by Pzena Investment Management with a $1.1 million position. Other investors bullish on the company included Paloma Partners, Two Sigma Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Arrowstreet Capital allocated the biggest weight to Sasol Limited (NYSE:SSL), around 0.05% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to SSL.
Due to the fact that Sasol Limited (NYSE:SSL) has witnessed a decline in interest from the smart money, logic holds that there exists a select few fund managers that slashed their positions entirely by the end of the third quarter. Interestingly, Israel Englander’s Millennium Management cut the biggest position of all the hedgies followed by Insider Monkey, worth close to $2.9 million in stock. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $2.1 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 5 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Sasol Limited (NYSE:SSL) but similarly valued. These stocks are Prosperity Bancshares, Inc. (NYSE:PB), Zions Bancorporation, National Association (NASDAQ:ZION), Cenovus Energy Inc (NYSE:CVE), Nevro Corp (NYSE:NVRO), Skechers USA Inc (NYSE:SKX), Euronet Worldwide, Inc. (NASDAQ:EEFT), and Choice Hotels International, Inc. (NYSE:CHH). This group of stocks’ market values resemble SSL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PB | 27 | 105441 | 0 |
| ZION | 24 | 97741 | 0 |
| CVE | 18 | 241953 | -8 |
| NVRO | 34 | 815256 | -1 |
| SKX | 28 | 480907 | -5 |
| EEFT | 39 | 395554 | 2 |
| CHH | 27 | 124786 | 5 |
| Average | 28.1 | 323091 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $323 million. That figure was $32 million in SSL’s case. Euronet Worldwide, Inc. (NASDAQ:EEFT) is the most popular stock in this table. On the other hand Cenovus Energy Inc (NYSE:CVE) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Sasol Limited (NYSE:SSL) is even less popular than CVE. Our overall hedge fund sentiment score for SSL is 13.6. 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. Hedge funds clearly dropped the ball on SSL as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on SSL as the stock returned 12.1% since Q3 (through November 27th) and outperformed the market by an even larger margin.
Follow Sasol Ltd (NYSE:SSL)
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Disclosure: None. This article was originally published at Insider Monkey.
