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Did Hedge Funds Get Academy Sports and Outdoors, Inc. (ASO) Right?

·5 min read

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Academy Sports and Outdoors, Inc. (NASDAQ:ASO) based on that data and determine whether they were really smart about the stock.

Academy Sports and Outdoors, Inc. (NASDAQ:ASO) investors should pay attention to an increase in support from the world's most elite money managers of late. Academy Sports and Outdoors, Inc. (NASDAQ:ASO) was in 48 hedge funds' portfolios at the end of September. The all time high for this statistic was previously 45. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ASO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we're going to go over the recent hedge fund action regarding Academy Sports and Outdoors, Inc. (NASDAQ:ASO).

Robert Pohly of Samlyn Capital

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

At the end of the third quarter, a total of 48 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in ASO a year ago. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Among these funds, Samlyn Capital held the most valuable stake in Academy Sports and Outdoors, Inc. (NASDAQ:ASO), which was worth $216.5 million at the end of the third quarter. On the second spot was Maverick Capital which amassed $105.5 million worth of shares. Arrowstreet Capital, D E Shaw, and Armistice Capital 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 Six Columns Capital allocated the biggest weight to Academy Sports and Outdoors, Inc. (NASDAQ:ASO), around 11.78% of its 13F portfolio. Steamboat Capital Partners is also relatively very bullish on the stock, setting aside 5.45 percent of its 13F equity portfolio to ASO.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Samlyn Capital, managed by Robert Pohly, created the largest call position in Academy Sports and Outdoors, Inc. (NASDAQ:ASO). Samlyn Capital had $48.2 million invested in the company at the end of the quarter. Joseph Samuels's Islet Management also initiated a $40 million position during the quarter. The other funds with brand new ASO positions are Peter S. Park's Park West Asset Management, Gregg Moskowitz's Interval Partners, and Douglas Dossey and Arthur Young's Tensile Capital.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Academy Sports and Outdoors, Inc. (NASDAQ:ASO) but similarly valued. We will take a look at Onto Innovation Inc. (NYSE:ONTO), The Macerich Company (NYSE:MAC), Dillard's, Inc. (NYSE:DDS), LXP Industrial Trust (NYSE:LXP), Lyell Immunopharma Inc. (NASDAQ:LYEL), iHeartMedia, Inc. (NASDAQ:IHRT), and FirstCash Holdings, Inc. (NASDAQ:FCFS). This group of stocks' market values match ASO's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ONTO,21,270140,-4 MAC,10,99441,0 DDS,22,120218,4 LXP,15,251370,-1 LYEL,10,118788,10 IHRT,28,617608,0 FCFS,15,117819,-2 Average,17.3,227912,1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $228 million. That figure was $1213 million in ASO's case. iHeartMedia, Inc. (NASDAQ:IHRT) is the most popular stock in this table. On the other hand The Macerich Company (NYSE:MAC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is more popular among hedge funds. Our overall hedge fund sentiment score for ASO is 88. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, ASO wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ASO were disappointed as the stock returned -2.8% since the end of the third quarter (through 1/31) 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 all of these stocks already outperformed the market since 2019.

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