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Is Spire Inc. (SR) Going To Burn These Hedge Funds ?

Does Spire Inc. (NYSE:SR) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.

Is Spire Inc. (NYSE:SR) a buy, sell, or hold? Hedge funds are becoming hopeful. The number of bullish hedge fund bets advanced by 1 recently. Our calculations also showed that SR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). SR was in 13 hedge funds’ portfolios at the end of the third quarter of 2019. There were 12 hedge funds in our database with SR positions at the end of the previous quarter.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

At the moment there are many metrics shareholders put to use to value stocks. A duo of the less known metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outclass the S&P 500 by a very impressive amount (see the details here).

SAC CAPITAL ADVISORS

Steven Cohen of Point72 Asset Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds‘ buy/sell signals. Let’s review the new hedge fund action encompassing Spire Inc. (NYSE:SR).

How have hedgies been trading Spire Inc. (NYSE:SR)?

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in SR a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Spire Inc. (NYSE:SR), with a stake worth $68.3 million reported as of the end of September. Trailing Renaissance Technologies was AQR Capital Management, which amassed a stake valued at $5.1 million. Millennium Management, Point72 Asset Management, and Paloma Partners 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 Quantinno Capital allocated the biggest weight to Spire Inc. (NYSE:SR), around 0.3% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.06 percent of its 13F equity portfolio to SR.

Now, key money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, created the biggest position in Spire Inc. (NYSE:SR). Millennium Management had $2.4 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also made a $0.3 million investment in the stock during the quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Spire Inc. (NYSE:SR) but similarly valued. These stocks are CVR Energy, Inc. (NYSE:CVI), Envista Holdings Corporation (NYSE:NVST), The Boston Beer Company Inc (NYSE:SAM), and Helmerich & Payne, Inc. (NYSE:HP). This group of stocks’ market values resemble SR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CVI 26 3273232 7
NVST 21 255475 21
SAM 29 661168 6
HP 28 270247 -5
Average 26 1115031 7.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $1115 million. That figure was $81 million in SR’s case. The Boston Beer Company Inc (NYSE:SAM) is the most popular stock in this table. On the other hand Envista Holdings Corporation (NYSE:NVST) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Spire Inc. (NYSE:SR) is even less popular than NVST. Hedge funds dodged a bullet by taking a bearish stance towards SR. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SR investors were disappointed as the stock returned -11.3% during the fourth quarter (through the end of November) 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 so far in Q4.

Disclosure: None. This article was originally published at Insider Monkey.

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