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ANSYS, Inc. (ANSS) Fell Out Of Favor With Hedge Funds

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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 at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of ANSYS, Inc. (NASDAQ:ANSS).

ANSYS, Inc. (NASDAQ:ANSS) has seen a decrease in hedge fund interest in recent months. ANSYS, Inc. (NASDAQ:ANSS) was in 33 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that ANSS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Charles Akre Akre Capital Management
Charles Akre Akre Capital Management

Charles Akre of Akre Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium 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. Keeping this in mind we're going to go over the key hedge fund action surrounding ANSYS, Inc. (NASDAQ:ANSS).

Do Hedge Funds Think ANSS Is A Good Stock To Buy Now?

At the end of March, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from one quarter earlier. By comparison, 31 hedge funds held shares or bullish call options in ANSS a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Impax Asset Management held the most valuable stake in ANSYS, Inc. (NASDAQ:ANSS), which was worth $217.8 million at the end of the fourth quarter. On the second spot was Akre Capital Management which amassed $207.1 million worth of shares. Alkeon Capital Management, Holocene Advisors, and Intermede Investment Partners 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 Crestwood Capital Management allocated the biggest weight to ANSYS, Inc. (NASDAQ:ANSS), around 9.96% of its 13F portfolio. Columbus Point is also relatively very bullish on the stock, dishing out 5.23 percent of its 13F equity portfolio to ANSS.

Since ANSYS, Inc. (NASDAQ:ANSS) has witnessed bearish sentiment from the smart money, it's safe to say that there was a specific group of funds that elected to cut their positions entirely in the first quarter. Intriguingly, Robert Joseph Caruso's Select Equity Group dropped the largest stake of the "upper crust" of funds monitored by Insider Monkey, comprising close to $132.8 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also dumped its stock, about $7.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 7 funds in the first quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as ANSYS, Inc. (NASDAQ:ANSS) but similarly valued. These stocks are Otis Worldwide Corporation (NYSE:OTIS), Valero Energy Corporation (NYSE:VLO), Liberty Broadband Corp (NASDAQ:LBRDA), Liberty Broadband Corp (NASDAQ:LBRDK), Discover Financial Services (NYSE:DFS), First Republic Bank (NYSE:FRC), and ViacomCBS Inc. (NASDAQ:VIAC). This group of stocks' market caps are closest to ANSS's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OTIS,52,2750826,-7 VLO,41,462502,3 LBRDA,23,774868,-3 LBRDK,70,6857308,-10 DFS,45,654294,2 FRC,41,1262066,7 VIAC,89,2349597,45 Average,51.6,2158780,5.3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 51.6 hedge funds with bullish positions and the average amount invested in these stocks was $2159 million. That figure was $1503 million in ANSS's case. ViacomCBS Inc. (NASDAQ:VIAC) is the most popular stock in this table. On the other hand Liberty Broadband Corp (NASDAQ:LBRDA) is the least popular one with only 23 bullish hedge fund positions. ANSYS, Inc. (NASDAQ:ANSS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ANSS is 30.3. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 22.8% in 2021 through July 2nd and surpassed the market again by 6 percentage points. Unfortunately ANSS wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ANSS investors were disappointed as the stock returned 4.1% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.