Alithya Group inc. (ALYA): Hedge Funds In Wait-and-See Mode
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Alithya Group inc. (NASDAQ:ALYA)?
Hedge fund interest in Alithya Group inc. (NASDAQ:ALYA) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Exantas Capital Corp. (NYSE:XAN), Marker Therapeutics, Inc. (NASDAQ:MRKR), and Chimerix Inc (NASDAQ:CMRX) to gather more data points. Our calculations also showed that ALYA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_738761" align="aligncenter" width="400"]
Fred DiSanto of Ancora Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's analyze the fresh hedge fund action regarding Alithya Group inc. (NASDAQ:ALYA).
What have hedge funds been doing with Alithya Group inc. (NASDAQ:ALYA)?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in ALYA 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.
Of the funds tracked by Insider Monkey, Ancora Advisors, managed by Frederick DiSanto, holds the number one position in Alithya Group inc. (NASDAQ:ALYA). Ancora Advisors has a $3.3 million position in the stock, comprising 0.2% of its 13F portfolio. On Ancora Advisors's heels is Mario Gabelli of GAMCO Investors, with a $1.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions contain Jim Simons (founder)'s Renaissance Technologies, John W. Rogers's Ariel Investments and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Ancora Advisors allocated the biggest weight to Alithya Group inc. (NASDAQ:ALYA), around 0.15% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to ALYA.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the first quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now take a look at hedge fund activity in other stocks similar to Alithya Group inc. (NASDAQ:ALYA). We will take a look at Exantas Capital Corp. (NYSE:XAN), Marker Therapeutics, Inc. (NASDAQ:MRKR), Chimerix Inc (NASDAQ:CMRX), and ContraFect Corp (NASDAQ:CFRX). All of these stocks' market caps are similar to ALYA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XAN,11,14181,-5 MRKR,5,3475,-1 CMRX,11,13139,2 CFRX,5,4605,-2 Average,8,8850,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $7 million in ALYA's case. Exantas Capital Corp. (NYSE:XAN) is the most popular stock in this table. On the other hand Marker Therapeutics, Inc. (NASDAQ:MRKR) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Alithya Group inc. (NASDAQ:ALYA) is even less popular than MRKR. Hedge funds dodged a bullet by taking a bearish stance towards ALYA. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately ALYA wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ALYA investors were disappointed as the stock returned -8% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
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