At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Silgan Holdings Inc. (NASDAQ:SLGN) makes for a good investment right now.
Is SLGN a good stock to buy now? Hedge funds were becoming less hopeful. The number of bullish hedge fund bets shrunk by 4 in recent months. Silgan Holdings Inc. (NASDAQ:SLGN) was in 15 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 20. Our calculations also showed that SLGN 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 19 hedge funds in our database with SLGN positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most investors, hedge funds are perceived as unimportant, outdated financial vehicles of yesteryear. While there are over 8000 funds with their doors open at the moment, Our researchers look at the elite of this group, around 850 funds. It is estimated that this group of investors have their hands on bulk of all hedge funds’ total capital, and by keeping an eye on their matchless picks, Insider Monkey has spotted a few investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per 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. Now we’re going to take a glance at the new hedge fund action encompassing Silgan Holdings Inc. (NASDAQ:SLGN).
Do Hedge Funds Think SLGN Is A Good Stock To Buy Now?
At third quarter’s end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in SLGN a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
More specifically, Cardinal Capital was the largest shareholder of Silgan Holdings Inc. (NASDAQ:SLGN), with a stake worth $122.5 million reported as of the end of September. Trailing Cardinal Capital was AQR Capital Management, which amassed a stake valued at $22.7 million. Millennium Management, Renaissance Technologies, and Citadel Investment Group 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 Cardinal Capital allocated the biggest weight to Silgan Holdings Inc. (NASDAQ:SLGN), around 5.12% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, designating 0.35 percent of its 13F equity portfolio to SLGN.
Due to the fact that Silgan Holdings Inc. (NASDAQ:SLGN) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedge funds that slashed their positions entirely heading into Q4. Intriguingly, Andrew Byington’s Appian Way Asset Management dumped the biggest position of the “upper crust” of funds watched by Insider Monkey, valued at close to $5.1 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also said goodbye to its stock, about $1.1 million worth. These moves are important to note, as aggregate hedge fund interest fell by 4 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Silgan Holdings Inc. (NASDAQ:SLGN) but similarly valued. These stocks are NeoGenomics, Inc. (NASDAQ:NEO), Nexstar Media Group, Inc. (NASDAQ:NXST), The Timken Company (NYSE:TKR), Mattel, Inc. (NASDAQ:MAT), Companhia Siderurgica Nacional (NYSE:SID), Acuity Brands, Inc. (NYSE:AYI), and Virgin Galactic Holdings, Inc. (NYSE:SPCE). This group of stocks’ market caps are similar to SLGN’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $389 million. That figure was $208 million in SLGN’s case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand Companhia Siderurgica Nacional (NYSE:SID) is the least popular one with only 7 bullish hedge fund positions. Silgan Holdings Inc. (NASDAQ:SLGN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SLGN is 35.3. 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. 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and surpassed the market again by 15.8 percentage points. Unfortunately SLGN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SLGN investors were disappointed as the stock returned -3.4% since the end of September (through 12/14) 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.