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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. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded ANSYS, Inc. (NASDAQ:ANSS) and determine whether the smart money was really smart about this stock.
Is ANSYS, Inc. (NASDAQ:ANSS) ready to rally soon? Hedge funds were in an optimistic mood. The number of bullish hedge fund positions went up by 9 recently. ANSYS, Inc. (NASDAQ:ANSS) was in 40 hedge funds' portfolios at the end of June. The all time high for this statistics is 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ANSS isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 31 hedge funds in our database with ANSS holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of methods stock market investors employ to evaluate stocks. Some of the most useful methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite fund managers can outpace the S&P 500 by a healthy margin (see the details here).
Blair Levinsky of Waratah Capital Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. Legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 let's take a peek at the fresh hedge fund action encompassing ANSYS, Inc. (NASDAQ:ANSS).
How have hedgies been trading ANSYS, Inc. (NASDAQ:ANSS)?
Heading into the third quarter of 2020, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from the first quarter of 2020. By comparison, 25 hedge funds held shares or bullish call options in ANSS a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Select Equity Group was the largest shareholder of ANSYS, Inc. (NASDAQ:ANSS), with a stake worth $221.2 million reported as of the end of September. Trailing Select Equity Group was Ako Capital, which amassed a stake valued at $202.8 million. Akre Capital Management, Alkeon Capital Management, and Impax Asset 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 Crestwood Capital Management allocated the biggest weight to ANSYS, Inc. (NASDAQ:ANSS), around 7.55% of its 13F portfolio. Intermede Investment Partners is also relatively very bullish on the stock, earmarking 4.69 percent of its 13F equity portfolio to ANSS.
As aggregate interest increased, some big names have jumped into ANSYS, Inc. (NASDAQ:ANSS) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the biggest position in ANSYS, Inc. (NASDAQ:ANSS). Balyasny Asset Management had $27.8 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky's Waratah Capital Advisors also initiated a $13.8 million position during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners, Richard SchimeláandáLawrence Sapanski's Cinctive Capital Management, and David Harding's Winton Capital Management.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as ANSYS, Inc. (NASDAQ:ANSS) but similarly valued. We will take a look at Okta, Inc. (NASDAQ:OKTA), HP Inc. (NYSE:HPQ), McKesson Corporation (NYSE:MCK), Public Service Enterprise Group Incorporated (NYSE:PEG), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), Credit Suisse Group AG (NYSE:CS), and Nokia Corporation (NYSE:NOK). This group of stocks' market values are closest to ANSS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OKTA,60,1990664,12 HPQ,35,1106876,-8 MCK,61,1958790,-2 PEG,31,649382,-3 ALXN,57,3577628,1 CS,14,134420,3 NOK,26,218711,3 Average,40.6,1376639,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.6 hedge funds with bullish positions and the average amount invested in these stocks was $1377 million. That figure was $1323 million in ANSS's case. McKesson Corporation (NYSE:MCK) is the most popular stock in this table. On the other hand Credit Suisse Group AG (NYSE:CS) is the least popular one with only 14 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 overall hedge fund sentiment score for ANSS is 67.7. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 33% in 2020 through the end of August and beat the market by 23.2 percentage points. A small number of hedge funds were also right about betting on ANSS, though not to the same extent, as the stock returned 16.2% during the first two months of Q3 and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.