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 StoneX Group Inc. (NASDAQ:SNEX) makes for a good investment right now.
Is SNEX a good stock to buy now? StoneX Group Inc. (NASDAQ:SNEX) was in 12 hedge funds’ portfolios at the end of September. The all time high for this statistics is 15. SNEX has experienced a decrease in activity from the world’s largest hedge funds lately. There were 14 hedge funds in our database with SNEX positions at the end of the second quarter. Our calculations also showed that SNEX 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most investors, hedge funds are perceived as unimportant, outdated investment tools of the past. While there are over 8000 funds with their doors open today, Our experts look at the moguls of this group, around 850 funds. These money managers have their hands on the majority of the smart money’s total capital, and by watching their inimitable equity investments, Insider Monkey has unsheathed a few investment strategies that have historically outstripped Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat 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 peek at the recent hedge fund action surrounding StoneX Group Inc. (NASDAQ:SNEX).
Do Hedge Funds Think SNEX Is A Good Stock To Buy Now?
At third quarter’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SNEX 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.
More specifically, Nine Ten Partners was the largest shareholder of StoneX Group Inc. (NASDAQ:SNEX), with a stake worth $54.7 million reported as of the end of September. Trailing Nine Ten Partners was Private Capital Management, which amassed a stake valued at $24.9 million. Cove Street Capital, Royce & Associates, and Arrowstreet Capital 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 Nine Ten Partners allocated the biggest weight to StoneX Group Inc. (NASDAQ:SNEX), around 11.37% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, designating 5.69 percent of its 13F equity portfolio to SNEX.
Because StoneX Group Inc. (NASDAQ:SNEX) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers who sold off their positions entirely heading into Q4. At the top of the heap, Michael A. Price and Amos Meron’s Empyrean Capital Partners sold off the largest stake of the 750 funds monitored by Insider Monkey, totaling close to $2.8 million in stock, and David Harding’s Winton Capital Management was right behind this move, as the fund said goodbye to about $1.2 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 2 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as StoneX Group Inc. (NASDAQ:SNEX) but similarly valued. These stocks are Tupperware Brands Corporation (NYSE:TUP), Eventbrite, Inc. (NYSE:EB), Nkarta, Inc. (NASDAQ:NKTX), KKR Real Estate Finance Trust Inc. (NYSE:KREF), Trinseo S.A. (NYSE:TSE), Sally Beauty Holdings, Inc. (NYSE:SBH), and Signet Jewelers Limited (NYSE:SIG). All of these stocks’ market caps resemble SNEX’s market cap.
|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 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $114 million in SNEX’s case. Sally Beauty Holdings, Inc. (NYSE:SBH) is the most popular stock in this table. On the other hand KKR Real Estate Finance Trust Inc. (NYSE:KREF) is the least popular one with only 6 bullish hedge fund positions. StoneX Group Inc. (NASDAQ:SNEX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SNEX is 41.3. 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. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on SNEX as the stock returned 25.7% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.