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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. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards Axalta Coating Systems Ltd (NYSE:AXTA).
Is AXTA stock a buy or sell? Axalta Coating Systems Ltd (NYSE:AXTA) was in 46 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 60. AXTA has seen an increase in activity from the world's largest hedge funds lately. There were 45 hedge funds in our database with AXTA holdings at the end of September. Our calculations also showed that AXTA isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Warren Buffett of Berkshire Hathaway
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article).With all of this in mind we're going to take a glance at the fresh hedge fund action encompassing Axalta Coating Systems Ltd (NYSE:AXTA).
Do Hedge Funds Think AXTA Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AXTA over the last 22 quarters. With the smart money's sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Berkshire Hathaway was the largest shareholder of Axalta Coating Systems Ltd (NYSE:AXTA), with a stake worth $668.6 million reported as of the end of December. Trailing Berkshire Hathaway was Rivulet Capital, which amassed a stake valued at $182.5 million. Citadel Investment Group, Sessa Capital, and Millennium Management 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 Rivulet Capital allocated the biggest weight to Axalta Coating Systems Ltd (NYSE:AXTA), around 9.03% of its 13F portfolio. MD Sass is also relatively very bullish on the stock, setting aside 5.7 percent of its 13F equity portfolio to AXTA.
As industrywide interest jumped, some big names were breaking ground themselves. Lakewood Capital Management, managed by Anthony Bozza, established the largest position in Axalta Coating Systems Ltd (NYSE:AXTA). Lakewood Capital Management had $38.7 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also initiated a $32.8 million position during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson's Adage Capital Management, David Zorub's Parsifal Capital Management, and John Brennan's Sirios Capital Management.
Let's also examine hedge fund activity in other stocks similar to Axalta Coating Systems Ltd (NYSE:AXTA). We will take a look at Planet Fitness Inc (NYSE:PLNT), nCino, Inc. (NASDAQ:NCNO), Manhattan Associates, Inc. (NASDAQ:MANH), PVH Corp (NYSE:PVH), Post Holdings Inc (NYSE:POST), ITT Inc. (NYSE:ITT), and Futu Holdings Limited (NASDAQ:FUTU). All of these stocks' market caps are similar to AXTA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PLNT,47,1704616,2 NCNO,28,177115,2 MANH,23,288212,1 PVH,37,1132304,9 POST,27,1536661,-3 ITT,28,406807,-2 FUTU,17,334170,2 Average,29.6,797126,1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.6 hedge funds with bullish positions and the average amount invested in these stocks was $797 million. That figure was $1667 million in AXTA's case. Planet Fitness Inc (NYSE:PLNT) is the most popular stock in this table. On the other hand Futu Holdings Limited (NASDAQ:FUTU) is the least popular one with only 17 bullish hedge fund positions. Axalta Coating Systems Ltd (NYSE:AXTA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AXTA is 77.3. 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 positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately AXTA wasn't nearly as popular as these 30 stocks and hedge funds that were betting on AXTA were disappointed as the stock returned 2.7% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.