Where Do Hedge Funds Stand On JELD-WEN Holding, Inc. (JELD)?

At Insider Monkey, we pore over the filings of nearly 866 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 March 31st. In this article, we will use that wealth of knowledge to determine whether or not JELD-WEN Holding, Inc. (NYSE:JELD) makes for a good investment right now.

JELD-WEN Holding, Inc. (NYSE:JELD) was in 27 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 29. JELD investors should pay attention to an increase in hedge fund interest in recent months. There were 22 hedge funds in our database with JELD positions at the end of the fourth quarter. Our calculations also showed that JELD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Richard Pzena - Pzena Investment Management

Richard S. Pzena of Pzena Investment Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s analyze the new hedge fund action regarding JELD-WEN Holding, Inc. (NYSE:JELD).

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

At the end of March, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 23% from the fourth quarter of 2020. On the other hand, there were a total of 20 hedge funds with a bullish position in JELD 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.

The largest stake in JELD-WEN Holding, Inc. (NYSE:JELD) was held by Pzena Investment Management, which reported holding $152.4 million worth of stock at the end of December. It was followed by Balyasny Asset Management with a $24.8 million position. Other investors bullish on the company included Arrowstreet Capital, Royce & Associates, and CaaS Capital. In terms of the portfolio weights assigned to each position Soapstone Capital allocated the biggest weight to JELD-WEN Holding, Inc. (NYSE:JELD), around 2.92% of its 13F portfolio. BeaconLight Capital is also relatively very bullish on the stock, earmarking 1.34 percent of its 13F equity portfolio to JELD.

As industrywide interest jumped, specific money managers have been driving this bullishness. CaaS Capital, managed by Frank Fu, created the most outsized position in JELD-WEN Holding, Inc. (NYSE:JELD). CaaS Capital had $9.8 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $4.2 million position during the quarter. The other funds with brand new JELD positions are Matthew L Pinz’s Pinz Capital, Mark Coe’s Intrinsic Edge Capital, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s now take a look at hedge fund activity in other stocks similar to JELD-WEN Holding, Inc. (NYSE:JELD). These stocks are ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), Magnolia Oil & Gas Corporation (NYSE:MGY), LendingTree, Inc (NASDAQ:TREE), Arconic Corporation (NYSE:ARNC), Corcept Therapeutics Incorporated (NASDAQ:CORT), Fulgent Genetics, Inc. (NASDAQ:FLGT), and Nelnet, Inc. (NYSE:NNI). This group of stocks’ market caps are closest to JELD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZIM 14 199420 14
MGY 21 151925 0
TREE 25 568101 -1
ARNC 26 718006 2
CORT 15 269878 -5
FLGT 18 98684 6
NNI 11 171625 -3
Average 18.6 311091 1.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $311 million. That figure was $290 million in JELD’s case. Arconic Corporation (NYSE:ARNC) is the most popular stock in this table. On the other hand Nelnet, Inc. (NYSE:NNI) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks JELD-WEN Holding, Inc. (NYSE:JELD) is more popular among hedge funds. Our overall hedge fund sentiment score for JELD is 87.9. 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% in 2021 through July 9th and still beat the market by 6.7 percentage points. Unfortunately JELD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on JELD were disappointed as the stock returned -8.3% since the end of the first quarter (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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