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 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of Standex International Corp. (NYSE:SXI).
Is Standex International Corp. (NYSE:SXI) a healthy stock for your portfolio? The smart money is becoming less hopeful. The number of bullish hedge fund bets dropped by 3 lately. Our calculations also showed that SXI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). SXI was in 9 hedge funds’ portfolios at the end of the first quarter of 2020. There were 12 hedge funds in our database with SXI positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are seen as underperforming, outdated financial vehicles of the past. While there are more than 8000 funds in operation at the moment, We choose to focus on the moguls of this club, about 850 funds. Most estimates calculate that this group of people have their hands on bulk of the hedge fund industry’s total asset base, and by paying attention to their top investments, Insider Monkey has determined various investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to analyze the fresh hedge fund action encompassing Standex International Corp. (NYSE:SXI).
What have hedge funds been doing with Standex International Corp. (NYSE:SXI)?
Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SXI over the last 18 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jeffrey Bronchick’s Cove Street Capital has the most valuable position in Standex International Corp. (NYSE:SXI), worth close to $9.4 million, comprising 1.9% of its total 13F portfolio. The second most bullish fund manager is GAMCO Investors, managed by Mario Gabelli, which holds a $3.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Cove Street Capital allocated the biggest weight to Standex International Corp. (NYSE:SXI), around 1.92% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.04 percent of its 13F equity portfolio to SXI.
Due to the fact that Standex International Corp. (NYSE:SXI) has experienced a decline in interest from hedge fund managers, logic holds that there is a sect of funds that decided to sell off their full holdings by the end of the first quarter. Interestingly, Joel Greenblatt’s Gotham Asset Management cut the biggest stake of all the hedgies watched by Insider Monkey, comprising close to $0.5 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also sold off its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds by the end of the first quarter.
Let’s now review hedge fund activity in other stocks similar to Standex International Corp. (NYSE:SXI). These stocks are Molecular Templates, Inc. (NASDAQ:MTEM), Akero Therapeutics, Inc. (NASDAQ:AKRO), Axcelis Technologies Inc (NASDAQ:ACLS), and The RealReal, Inc. (NASDAQ:REAL). This group of stocks’ market valuations match SXI’s market valuation.
|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 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $20 million in SXI’s case. Molecular Templates, Inc. (NASDAQ:MTEM) is the most popular stock in this table. On the other hand Axcelis Technologies Inc (NASDAQ:ACLS) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Standex International Corp. (NYSE:SXI) is even less popular than ACLS. Hedge funds dodged a bullet by taking a bearish stance towards SXI. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. Unfortunately SXI wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); SXI investors were disappointed as the stock returned 12.1% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.