Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of The Ensign Group, Inc. (NASDAQ:ENSG) based on that data.
Is ENSG a good stock to buy now? Hedge fund interest in The Ensign Group, Inc. (NASDAQ:ENSG) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that ENSG isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare ENSG to other stocks including Millicom International Cellular S.A. (NASDAQ:TIGO), Artisan Partners Asset Management Inc (NYSE:APAM), and Glacier Bancorp, Inc. (NASDAQ:GBCI) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a lot of indicators stock market investors put to use to evaluate stocks. A duo of the most innovative indicators are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the broader indices by a significant margin (see the details here).
Kamran Moghtaderi of Eversept Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind we're going to go over the fresh hedge fund action encompassing The Ensign Group, Inc. (NASDAQ:ENSG).
Do Hedge Funds Think ENSG Is A Good Stock To Buy Now?
At third quarter's end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ENSG over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of The Ensign Group, Inc. (NASDAQ:ENSG), with a stake worth $21.7 million reported as of the end of September. Trailing Arrowstreet Capital was Eversept Partners, which amassed a stake valued at $18.2 million. Royce & Associates, PDT Partners, and AQR Capital Management 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 Eversept Partners allocated the biggest weight to The Ensign Group, Inc. (NASDAQ:ENSG), around 4.1% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, setting aside 0.22 percent of its 13F equity portfolio to ENSG.
Because The Ensign Group, Inc. (NASDAQ:ENSG) has faced bearish sentiment from hedge fund managers, we can see that there was a specific group of funds that slashed their positions entirely last quarter. Interestingly, David Harding's Winton Capital Management cut the biggest position of the 750 funds tracked by Insider Monkey, comprising about $4.4 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund sold off about $1 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's also examine hedge fund activity in other stocks similar to The Ensign Group, Inc. (NASDAQ:ENSG). These stocks are Millicom International Cellular S.A. (NASDAQ:TIGO), Artisan Partners Asset Management Inc (NYSE:APAM), Glacier Bancorp, Inc. (NASDAQ:GBCI), Popular Inc (NASDAQ:BPOP), ACI Worldwide Inc (NASDAQ:ACIW), RBC Bearings Incorporated (NASDAQ:ROLL), and SLM Corp (NASDAQ:SLM). This group of stocks' market values are similar to ENSG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TIGO,8,60122,0 APAM,26,271017,5 GBCI,21,53874,1 BPOP,30,554530,-3 ACIW,29,429393,7 ROLL,18,51655,1 SLM,22,630822,-10 Average,22,293059,0.1 [/table]
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $293 million. That figure was $65 million in ENSG's case. Popular Inc (NASDAQ:BPOP) is the most popular stock in this table. On the other hand Millicom International Cellular S.A. (NASDAQ:TIGO) is the least popular one with only 8 bullish hedge fund positions. The Ensign Group, Inc. (NASDAQ:ENSG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ENSG 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on ENSG as the stock returned 25.9% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
