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Were Hedge Funds Right About Backing Eaton Vance Corp (EV)?

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Eaton Vance Corp (NYSE:EV).

Eaton Vance Corp (NYSE:EV) investors should pay attention to an increase in hedge fund interest lately. EV was in 15 hedge funds’ portfolios at the end of the second quarter of 2019. There were 13 hedge funds in our database with EV holdings at the end of the previous quarter. Our calculations also showed that EV isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are dozens of tools shareholders employ to evaluate their holdings. A duo of the most innovative tools are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can outpace their index-focused peers by a superb amount (see the details here).

GOTHAM ASSET MANAGEMENT

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a glance at the key hedge fund action surrounding Eaton Vance Corp (NYSE:EV).

How are hedge funds trading Eaton Vance Corp (NYSE:EV)?

At the end of the second quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in EV a year ago. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

EV_oct2019

Among these funds, Citadel Investment Group held the most valuable stake in Eaton Vance Corp (NYSE:EV), which was worth $69.4 million at the end of the second quarter. On the second spot was Millennium Management which amassed $13.2 million worth of shares. Moreover, D E Shaw, GLG Partners, and Holocene Advisors were also bullish on Eaton Vance Corp (NYSE:EV), allocating a large percentage of their portfolios to this stock.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Quantinno Capital, managed by Hoon Kim, established the most outsized position in Eaton Vance Corp (NYSE:EV). Quantinno Capital had $0.8 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington, Joel Greenblatt’s Gotham Asset Management, and Claes Fornell’s CSat Investment Advisory.

Let’s go over hedge fund activity in other stocks similar to Eaton Vance Corp (NYSE:EV). We will take a look at Grupo Aeroportuario del Sureste (NYSE:ASR), Portland General Electric Company (NYSE:POR), Shell Midstream Partners LP (NYSE:SHLX), and GDS Holdings Limited (NASDAQ:GDS). All of these stocks’ market caps resemble EV’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASR 7 44592 -1
POR 18 280297 -1
SHLX 5 11536 -2
GDS 28 1106492 -5
Average 14.5 360729 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $361 million. That figure was $97 million in EV’s case. GDS Holdings Limited (NASDAQ:GDS) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 5 bullish hedge fund positions. Eaton Vance Corp (NYSE:EV) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on EV, though not to the same extent, as the stock returned 5% during the third quarter and outperformed the market as well.

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

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