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 Standex International Corp. (NYSE:SXI).
Is Standex International Corp. (NYSE:SXI) a buy, sell, or hold? Hedge funds were becoming more confident. The number of long hedge fund positions increased by 3 in recent months. Standex International Corp. (NYSE:SXI) was in 10 hedge funds' portfolios at the end of June. The all time high for this statistic is 16. Our calculations also showed that SXI isn't among the 30 most popular stocks among hedge funds (click for Q2 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 79 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.
James A. Mitarotonda of Barington Capital Group
With all of this in mind we're going to take a peek at the fresh hedge fund action encompassing Standex International Corp. (NYSE:SXI).
Do Hedge Funds Think SXI Is A Good Stock To Buy Now?
At the end of June, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the first quarter of 2020. On the other hand, there were a total of 12 hedge funds with a bullish position in SXI a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Cove Street Capital, managed by Jeffrey Bronchick, holds the biggest position in Standex International Corp. (NYSE:SXI). Cove Street Capital has a $13.1 million position in the stock, comprising 1.9% of its 13F portfolio. On Cove Street Capital's heels is Barington Capital Group, managed by James A. Mitarotonda, which holds a $11.4 million position; the fund has 10.6% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish include Mario Gabelli's GAMCO Investors, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Cliff Asness's AQR Capital Management. In terms of the portfolio weights assigned to each position Barington Capital Group allocated the biggest weight to Standex International Corp. (NYSE:SXI), around 10.64% of its 13F portfolio. Cove Street Capital is also relatively very bullish on the stock, dishing out 1.89 percent of its 13F equity portfolio to SXI.
As one would reasonably expect, key hedge funds have jumped into Standex International Corp. (NYSE:SXI) headfirst. SG Capital Management, managed by Ken Grossman and Glen Schneider, initiated the largest position in Standex International Corp. (NYSE:SXI). SG Capital Management had $1 million invested in the company at the end of the quarter. Renaissance Technologies also made a $0.5 million investment in the stock during the quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Standex International Corp. (NYSE:SXI) but similarly valued. We will take a look at National Bank Holdings Corp (NYSE:NBHC), Nexa Resources S.A. (NYSE:NEXA), Century Aluminum Co (NASDAQ:CENX), XL Fleet Corp. (NYSE:XL), Community Healthcare Trust Inc (NYSE:CHCT), The Pennant Group, Inc. (NASDAQ:PNTG), and Dynavax Technologies Corporation (NASDAQ:DVAX). This group of stocks' market valuations are similar to SXI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NBHC,11,74827,-1 NEXA,5,6589,0 CENX,15,112844,0 XL,7,3772,-5 CHCT,12,55548,-2 PNTG,13,30631,2 DVAX,15,101274,1 Average,11.1,55069,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $43 million in SXI's case. Century Aluminum Co (NASDAQ:CENX) is the most popular stock in this table. On the other hand Nexa Resources S.A. (NYSE:NEXA) is the least popular one with only 5 bullish hedge fund positions. Standex International Corp. (NYSE:SXI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SXI is 51.8. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on SXI as the stock returned 7.1% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
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