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Is ASML Stock A Buy or Sell?

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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31st, so let’s proceed with the discussion of the hedge fund sentiment on ASML Holding N.V. (NASDAQ:ASML).

Is ASML stock a buy? ASML Holding N.V. (NASDAQ:ASML) has experienced an increase in hedge fund interest lately. ASML Holding N.V. (NASDAQ:ASML) was in 30 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 23 hedge funds in our database with ASML holdings at the end of September. Our calculations also showed that ASML isn't among the 30 most popular stocks among hedge funds (click for Q4 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 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Peter Rathjens Arrowstreet Capital 394
Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. With all of this in mind let's take a gander at the new hedge fund action regarding ASML Holding N.V. (NASDAQ:ASML).

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

Heading into the first quarter of 2021, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ASML over the last 22 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

Is ASML A Good Stock To Buy?
Is ASML A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Ken Fisher's Fisher Asset Management has the number one position in ASML Holding N.V. (NASDAQ:ASML), worth close to $1.8803 billion, corresponding to 1.4% of its total 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $388.2 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish encompass Ken Griffin's Citadel Investment Group, Josh Resnick's Jericho Capital Asset Management and Brandon Haley's Holocene Advisors. In terms of the portfolio weights assigned to each position Unio Capital allocated the biggest weight to ASML Holding N.V. (NASDAQ:ASML), around 4.26% of its 13F portfolio. Force Hill Capital Management is also relatively very bullish on the stock, setting aside 3.82 percent of its 13F equity portfolio to ASML.

As industrywide interest jumped, some big names were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, assembled the most valuable position in ASML Holding N.V. (NASDAQ:ASML). Holocene Advisors had $55.7 million invested in the company at the end of the quarter. Michael Rockefeller and Karl Kroeker's Woodline Partners also made a $45.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny's Balyasny Asset Management, Kevin Cottrell and Chris LaSusa's KCL Capital, and Suraj Parkash Chopra's Force Hill Capital Management.

Let's also examine hedge fund activity in other stocks similar to ASML Holding N.V. (NASDAQ:ASML). These stocks are PepsiCo, Inc. (NYSE:PEP), AT&T Inc. (NYSE:T), Pfizer Inc. (NYSE:PFE), salesforce.com, inc. (NYSE:CRM), Intel Corporation (NASDAQ:INTC), Abbott Laboratories (NYSE:ABT), and Oracle Corporation (NASDAQ:ORCL). This group of stocks' market values resemble ASML's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PEP,56,4288005,4 T,58,1045081,7 PFE,63,1848417,-3 CRM,97,10576035,-9 INTC,72,5578824,6 ABT,64,4303482,2 ORCL,52,2450210,-4 Average,66,4298579,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 66 hedge funds with bullish positions and the average amount invested in these stocks was $4299 million. That figure was $2976 million in ASML's case. salesforce.com, inc. (NYSE:CRM) is the most popular stock in this table. On the other hand Oracle Corporation (NASDAQ:ORCL) is the least popular one with only 52 bullish hedge fund positions. Compared to these stocks ASML Holding N.V. (NASDAQ:ASML) is even less popular than ORCL. Our overall hedge fund sentiment score for ASML is 40. 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. Hedge funds clearly dropped the ball on ASML as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. A small number of hedge funds were also right about betting on ASML as the stock returned 29.3% since Q4 (through April 12th) and outperformed the market by an even larger margin.

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

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