Is Alithya Group inc. (NASDAQ:ALYA) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Alithya Group inc. (NASDAQ:ALYA) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds' portfolios at the end of the first quarter of 2021. Our calculations also showed that ALYA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare ALYA to other stocks including Titan Medical Inc. (NASDAQ:TMDI), SandRidge Energy Inc. (NYSE:SD), and Oak Valley Bancorp (NASDAQ:OVLY) to get a better sense of its popularity.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Mario Gabelli of GAMCO Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. Keeping this in mind we're going to check out the key hedge fund action regarding Alithya Group inc. (NASDAQ:ALYA).
Do Hedge Funds Think ALYA Is A Good Stock To Buy Now?
At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ALYA over the last 23 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ancora Advisors, managed by Frederick DiSanto, holds the biggest position in Alithya Group inc. (NASDAQ:ALYA). Ancora Advisors has a $6.8 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, managed by Mario Gabelli, which holds a $2.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish include Renaissance Technologies, Ken Griffin's Citadel Investment Group and . In terms of the portfolio weights assigned to each position Ancora Advisors allocated the biggest weight to Alithya Group inc. (NASDAQ:ALYA), around 0.19% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to ALYA.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let's also examine hedge fund activity in other stocks similar to Alithya Group inc. (NASDAQ:ALYA). These stocks are Titan Medical Inc. (NASDAQ:TMDI), SandRidge Energy Inc. (NYSE:SD), Oak Valley Bancorp (NASDAQ:OVLY), Aziyo Biologics, Inc. (NASDAQ:AZYO), Hepion Pharmaceuticals, Inc. (NASDAQ:HEPA), Navios Maritime Holdings Inc. (NYSE:NM), and Orgenesis Inc. (NASDAQ:ORGS). This group of stocks' market valuations are similar to ALYA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TMDI,4,2237,-2 SD,18,40591,5 OVLY,1,498,0 AZYO,6,15198,-1 HEPA,4,1131,0 NM,5,8952,4 ORGS,3,1715,1 Average,5.9,10046,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $11 million in ALYA's case. SandRidge Energy Inc. (NYSE:SD) is the most popular stock in this table. On the other hand Oak Valley Bancorp (NASDAQ:OVLY) is the least popular one with only 1 bullish hedge fund positions. Alithya Group inc. (NASDAQ:ALYA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ALYA is 33.8. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on ALYA as the stock returned 9.5% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.