Is Gentex Corporation (NASDAQ:GNTX) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Hedge fund interest in Gentex Corporation (NASDAQ:GNTX) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as New York Community Bancorp, Inc. (NYSE:NYCB-U), Pure Storage, Inc. (NYSE:PSTG), and AGCO Corporation (NYSE:AGCO) to gather more data points.
At the moment there are many indicators investors use to size up publicly traded companies. Some of the most innovative indicators are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outperform the broader indices by a superb margin (see the details here).
We're going to take a glance at the new hedge fund action surrounding Gentex Corporation (NASDAQ:GNTX).
Hedge fund activity in Gentex Corporation (NASDAQ:GNTX)
At Q1's end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2018. On the other hand, there were a total of 24 hedge funds with a bullish position in GNTX a year ago. With the smart money's sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in Gentex Corporation (NASDAQ:GNTX), which was worth $92.1 million at the end of the first quarter. On the second spot was Nitorum Capital which amassed $80.6 million worth of shares. Moreover, Royce & Associates, Point72 Asset Management, and Millennium Management were also bullish on Gentex Corporation (NASDAQ:GNTX), allocating a large percentage of their portfolios to this stock.
Due to the fact that Gentex Corporation (NASDAQ:GNTX) has experienced falling interest from the entirety of the hedge funds we track, it's safe to say that there were a few money managers that decided to sell off their entire stakes by the end of the third quarter. At the top of the heap, Andrew Feldstein and Stephen Siderow's Blue Mountain Capital dropped the biggest stake of the 700 funds tracked by Insider Monkey, worth close to $2 million in stock. Minhua Zhang's fund, Weld Capital Management, also dropped its stock, about $1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Gentex Corporation (NASDAQ:GNTX) but similarly valued. These stocks are New York Community Bancorp, Inc. (NYSE:NYCB-U), Pure Storage, Inc. (NYSE:PSTG), AGCO Corporation (NYSE:AGCO), and Quanta Services Inc (NYSE:PWR). This group of stocks' market values match GNTX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NYCB-U,3,26107,1 PSTG,21,725624,-5 AGCO,26,200918,-6 PWR,24,831906,-3 Average,18.5,446139,-3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $308 million in GNTX's case. AGCO Corporation (NYSE:AGCO) is the most popular stock in this table. On the other hand New York Community Bancorp, Inc. (NYSE:NYCB-U) is the least popular one with only 3 bullish hedge fund positions. Gentex Corporation (NASDAQ:GNTX) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on GNTX as the stock returned 15% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.