We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Shiloh Industries, Inc. (NASDAQ:SHLO).
Shiloh Industries, Inc. (NASDAQ:SHLO) was in 5 hedge funds’ portfolios at the end of September. SHLO investors should be aware of a decrease in enthusiasm from smart money in recent months. There were 6 hedge funds in our database with SHLO holdings at the end of the previous quarter. Our calculations also showed that SHLO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are numerous indicators investors use to size up stocks. Some of the most innovative indicators are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best money managers can outperform their index-focused peers by a very impressive margin (see the details here).
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Keeping this in mind we’re going to check out the key hedge fund action encompassing Shiloh Industries, Inc. (NASDAQ:SHLO).
How have hedgies been trading Shiloh Industries, Inc. (NASDAQ:SHLO)?
Heading into the fourth quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SHLO over the last 17 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in Shiloh Industries, Inc. (NASDAQ:SHLO) was held by Renaissance Technologies, which reported holding $1.2 million worth of stock at the end of September. It was followed by Ancora Advisors with a $0.4 million position. Other investors bullish on the company included Royce & Associates, Paloma Partners, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Ancora Advisors allocated the biggest weight to Shiloh Industries, Inc. (NASDAQ:SHLO), around 0.02% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, earmarking 0.0041 percent of its 13F equity portfolio to SHLO.
Due to the fact that Shiloh Industries, Inc. (NASDAQ:SHLO) has faced bearish sentiment from hedge fund managers, logic holds that there was a specific group of hedgies that elected to cut their entire stakes last quarter. Interestingly, Israel Englander’s Millennium Management dumped the biggest investment of all the hedgies watched by Insider Monkey, totaling close to $0.3 million in stock. Andrew Weiss’s fund, Weiss Asset Management, also said goodbye to its stock, about $0.1 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Shiloh Industries, Inc. (NASDAQ:SHLO). We will take a look at Waitr Holdings Inc. (NASDAQ:WTRH), Aspen Group Inc. (NASDAQ:ASPU), International Tower Hill Mines Ltd(USA] (NYSE:THM), and Carolina Trust Bank (NASDAQ:CART). This group of stocks’ market caps are similar to SHLO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WTRH | 10 | 15367 | -7 |
| ASPU | 3 | 7481 | -1 |
| THM | 4 | 35155 | -1 |
| CART | 5 | 6371 | 4 |
| Average | 5.5 | 16094 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $2 million in SHLO’s case. Waitr Holdings Inc. (NASDAQ:WTRH) is the most popular stock in this table. On the other hand Aspen Group Inc. (NASDAQ:ASPU) is the least popular one with only 3 bullish hedge fund positions. Shiloh Industries, Inc. (NASDAQ:SHLO) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SHLO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SHLO investors were disappointed as the stock returned -8% during the first two months of the fourth quarter 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
