Should I Avoid nVent Electric plc (NVT)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards nVent Electric plc (NYSE:NVT).

nVent Electric plc (NYSE:NVT) investors should be aware of a decrease in hedge fund interest in recent months. nVent Electric plc (NYSE:NVT) was in 30 hedge funds’ portfolios at the end of June. The all time high for this statistic is 34. There were 31 hedge funds in our database with NVT positions at the end of the first quarter. Our calculations also showed that NVT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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Charles Davidson - Wexford Capital

Charles Davidson of Wexford Capital

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Do Hedge Funds Think NVT Is A Good Stock To Buy Now?

At the end of the second quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in NVT over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ariel Investments, managed by John W. Rogers, holds the largest position in nVent Electric plc (NYSE:NVT). Ariel Investments has a $118.6 million position in the stock, comprising 1.1% of its 13F portfolio. Coming in second is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $43.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish consist of D. E. Shaw’s D E Shaw, Gregg Moskowitz’s Interval Partners and Chuck Royce’s Royce & Associates. In terms of the portfolio weights assigned to each position Diametric Capital allocated the biggest weight to nVent Electric plc (NYSE:NVT), around 2.5% of its 13F portfolio. Levin Easterly Partners is also relatively very bullish on the stock, dishing out 1.95 percent of its 13F equity portfolio to NVT.

Due to the fact that nVent Electric plc (NYSE:NVT) has experienced a decline in interest from the smart money, we can see that there lies a certain “tier” of hedge funds who sold off their full holdings last quarter. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group sold off the biggest stake of the 750 funds tracked by Insider Monkey, comprising close to $2.6 million in stock. Marc Majzner’s fund, Clearline Capital, also cut its stock, about $0.7 million worth. These moves are interesting, as aggregate hedge fund interest fell by 1 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as nVent Electric plc (NYSE:NVT) but similarly valued. We will take a look at JOYY Inc. (NASDAQ:YY), Hexcel Corporation (NYSE:HXL), Progyny, Inc. (NASDAQ:PGNY), Rapid7 Inc (NASDAQ:RPD), Leslie’s, Inc. (NASDAQ:LESL), Everbridge, Inc. (NASDAQ:EVBG), and The Wendy’s Company (NASDAQ:WEN). This group of stocks’ market caps resemble NVT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
YY 24 340371 4
HXL 22 165435 4
PGNY 39 290008 13
RPD 17 136746 -8
LESL 35 427806 8
EVBG 26 1200051 -23
WEN 30 1070385 4
Average 27.6 518686 0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $519 million. That figure was $401 million in NVT’s case. Progyny, Inc. (NASDAQ:PGNY) is the most popular stock in this table. On the other hand Rapid7 Inc (NASDAQ:RPD) is the least popular one with only 17 bullish hedge fund positions. nVent Electric plc (NYSE:NVT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NVT is 60. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on NVT as the stock returned 3.1% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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