Is ANSYS, Inc. (NASDAQ:ANSS) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
ANSYS, Inc. (NASDAQ:ANSS) was in 25 hedge funds' portfolios at the end of June. ANSS shareholders have witnessed a decrease in support from the world's most elite money managers in recent months. There were 28 hedge funds in our database with ANSS positions at the end of the previous quarter. Our calculations also showed that ANSS isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are tons of methods shareholders can use to value stocks. Some of the most innovative methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite hedge fund managers can outclass the S&P 500 by a healthy margin (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a peek at the recent hedge fund action encompassing ANSYS, Inc. (NASDAQ:ANSS).
What have hedge funds been doing with ANSYS, Inc. (NASDAQ:ANSS)?
Heading into the third quarter of 2019, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the first quarter of 2019. By comparison, 25 hedge funds held shares or bullish call options in ANSS a year ago. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Joseph Caruso's Select Equity Group has the biggest position in ANSYS, Inc. (NASDAQ:ANSS), worth close to $324.4 million, corresponding to 2.2% of its total 13F portfolio. Coming in second is AQR Capital Management, led by Cliff Asness, holding a $85 million position; 0.1% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish contain Brian Ashford-Russell and Tim Woolley's Polar Capital, Greg Poole's Echo Street Capital Management and Barry Dargan's Intermede Investment Partners.
Seeing as ANSYS, Inc. (NASDAQ:ANSS) has faced falling interest from the aggregate hedge fund industry, it's safe to say that there exists a select few hedgies that decided to sell off their entire stakes by the end of the second quarter. Intriguingly, Matthew Tewksbury's Stevens Capital Management cut the largest stake of the "upper crust" of funds watched by Insider Monkey, totaling close to $9.3 million in stock. Jeffrey Talpins's fund, Element Capital Management, also dropped its stock, about $1.4 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 3 funds by the end of the second quarter.
Let's check out hedge fund activity in other stocks similar to ANSYS, Inc. (NASDAQ:ANSS). We will take a look at Cincinnati Financial Corporation (NASDAQ:CINF), Diamondback Energy Inc (NASDAQ:FANG), Copart, Inc. (NASDAQ:CPRT), and Fortis Inc. (NYSE:FTS). This group of stocks' market valuations are similar to ANSS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CINF,18,567138,-3 FANG,47,1531990,0 CPRT,30,252281,6 FTS,12,256125,-1 Average,26.75,651884,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $652 million. That figure was $790 million in ANSS's case. Diamondback Energy Inc (NASDAQ:FANG) is the most popular stock in this table. On the other hand Fortis Inc. (NYSE:FTS) is the least popular one with only 12 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 calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on ANSS as the stock returned 8.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.