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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. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Amphenol Corporation (NYSE:APH) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is APH a good stock to buy? Amphenol Corporation (NYSE:APH) investors should be aware of a decrease in support from the world's most elite money managers lately. Amphenol Corporation (NYSE:APH) was in 39 hedge funds' portfolios at the end of June. The all time high for this statistic is 49. There were 42 hedge funds in our database with APH holdings at the end of March. Our calculations also showed that APH isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Phillip Gross of Adage Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV 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. With all of this in mind we're going to go over the key hedge fund action encompassing Amphenol Corporation (NYSE:APH).
Do Hedge Funds Think APH Is A Good Stock To Buy Now?
At second quarter's end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in APH over the last 24 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, Select Equity Group was the largest shareholder of Amphenol Corporation (NYSE:APH), with a stake worth $532.9 million reported as of the end of June. Trailing Select Equity Group was Arrowstreet Capital, which amassed a stake valued at $211.2 million. Woodline Partners, Adage Capital Management, and D E Shaw 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 Force Hill Capital Management allocated the biggest weight to Amphenol Corporation (NYSE:APH), around 4.5% of its 13F portfolio. Cartenna Capital is also relatively very bullish on the stock, setting aside 3.94 percent of its 13F equity portfolio to APH.
Because Amphenol Corporation (NYSE:APH) has witnessed a decline in interest from the aggregate hedge fund industry, it's safe to say that there exists a select few fund managers who were dropping their positions entirely last quarter. Intriguingly, Renaissance Technologies cut the largest investment of the "upper crust" of funds monitored by Insider Monkey, comprising close to $21.7 million in stock. Dmitry Balyasny's fund, Balyasny Asset Management, also said goodbye to its stock, about $20.1 million worth. These transactions are interesting, as total hedge fund interest fell by 3 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to Amphenol Corporation (NYSE:APH). These stocks are Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), Baxter International Inc. (NYSE:BAX), Prudential Financial Inc (NYSE:PRU), Las Vegas Sands Corp. (NYSE:LVS), PPG Industries, Inc. (NYSE:PPG), Cintas Corporation (NASDAQ:CTAS), and Sempra (NYSE:SRE). This group of stocks' market valuations resemble APH's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALXN,69,10090913,-8 BAX,46,2911204,6 PRU,28,494481,-9 LVS,48,1758510,-14 PPG,26,233709,1 CTAS,21,539216,-11 SRE,28,343994,1 Average,38,2338861,-4.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $2339 million. That figure was $1204 million in APH's case. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is the most popular stock in this table. On the other hand Cintas Corporation (NASDAQ:CTAS) is the least popular one with only 21 bullish hedge fund positions. Amphenol Corporation (NYSE:APH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for APH is 44.6. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on APH as the stock returned 9.9% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.